8NOVEMBER 2023WHY WE HAVEN'T REACHED A RECESSION YET AND HOW THAT SHOULD INFORM YOUR INVESTMENT DECISIONSBy Jim Steiner, Chief Investment Officer, 1834, Old National BankMany economists and market participants originally predicted a recession would have arrived by now. The thought was the Federal Reserve's aggressive interest rate increases would slow the economy down more than it has. While a slowdown is occurring, much of the economy is still on solid ground. The consumer and the labor market have been surprisingly resilient through the interest rate increases. In short, there are not enough workers in the U.S., which is making the Fed's mission to cool the labor market difficult. The lack of workers is creating sizable wage gains, too, which is partially why inflation has been so sticky. The number of unfilled job openings (demand) has exceeded the total number of persons unemployed (supply) every month since March 2018, except for the pandemic period. The number of job openings in the U.S. has hovered around 10 million for months with little signs of decreasing. More than 10,000 people in the U.S. are turning 65 every day for the next 15 years. That eye-popping statistic is putting more pressure on the labor market. Baby boomers are retiring faster than they can be replaced. Consumers are getting a boost in real incomes as inflation subsides, a banking crisis has so far failed to materialize despite tightening capital and lending requirements, and the agreement on the debt ceiling leaves overall fiscal stimulus intact.But not all the metrics are positive. What does the data say? Consumers are finding it increasingly difficult to keep up with inflation. Wage growth generally exceeded the rate of inflation for most of the 2010s. However, inflation has recently OPINIONIN MY
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