As talks of a recession continue, the US economy continues to build recovery momentum from the pandemic

The end of last year should be an economic dud. It was not. Instead, the US economy likely continued its recovery.

The first look at fourth quarter gross domestic product will be released on Thursday. Earlier in the quarter, many economists were predicting the economy would contract as 2022 ended amid the weight of high inflation, higher interest rates and general uncertainty over the coming months.

Now, economists expect the economy to have grown by nearly 2%, and the Federal Reserve Bank of Atlanta’s GDP-Now estimate calls for economic growth of 3.5%. That would be the fastest economic expansion of the year.

“Fourth-quarter GDP growth is looking better than previously expected,” Federal Reserve Bank of St. Louis President James Bullard told a group of Wisconsin bankers earlier this month. He noted that some forecasts predicted a recession, but “that turns out not to be the case.”

Far from it, it seems. Instead, America’s economy grew faster than usual in the second half of 2022. It even gained momentum as the Federal Reserve quickly hiked borrowing costs in hopes of containing and reversing blistering inflation.

The GDP data doesn’t jibe with the murky and insistent talk of a recession. It’s not an economic fact.

Inflation is cooling but still uncomfortably high. The job market remains strong, although the pace of layoffs, particularly at technology companies, remains brisk. The American consumer has shown resilience to higher interest rates even as household debt has risen rapidly.

Mark Zandi, chief economist at Moody’s Analytics, called it a “slowcession”. He still claims the 2023 recession is a “serious threat” but now believes the US will avoid an economic downturn.

“With luck and reasonably savvy Fed policy, the economy should avoid a full-blown downturn,” Zandi recently wrote.

While the talk of recession continues, the economy has recovered.

Tom Hudson is a financial journalist based in Washington, DC. He is Chief Content Officer at public radio station WAMU.