Looking ahead to 2023, the prevailing sentiment among economists, journalists and financial leaders was that the U.S. economy was on the verge of falling into a recession.
Experts believed that, on the one hand, interest rate increases implemented by the Federal Reserve in 2022 in its efforts to curb inflation would inevitably drag the economy down.
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“The MBA forecast calls for a recession in the first half of next year, driven by tighter financial conditions, lower business investment and slower global growth,” wrote Mortgage Bankers Association on October 24, 2022.
Then, on November 18, 2022, The Economist published an article with the headline: “Why a global recession is inevitable in 2023.”
It didn't happen. In fact, the US economy grew during 2023. And there are several theories as to why those gloomy predictions turned out to be wrong.
The most notable of these is that, unexpectedly, the labor market remained mostly strong throughout 2023 and unemployment remained low.
And as inflation steadily fell, investors warmed to the idea that the Federal Reserve would slow interest rate increases and could even begin cutting rates again in 2024. The stock market rose to record highs.
There were other widely held views about what kept the economy out of recession.
A popular belief was that the Taylor Swift Eras tour, mentioned in the Federal Reserve Bank of Philadelphia's Beige Book in its assessment of the city's suddenly strong hotel revenues, was saving the American economy by increasing demand.
But even if estimates in the $5 billion range of the total economic impact of Taylor Swift's tour turn out to be accurate, the U.S. economy is too expansive to give her full credit.
“There is no denying that the Eras Tour is a cultural phenomenon, but the tour's impact is not the only reason the United States has avoided a recession so far,” wrote Recruitonomics on August 10, 2023. “Instead, the high demand and impressive spending surrounding his tour contributes to the broader trend of massive consumer spending that has kept America afloat.”
Ellevest CEO Sallie Krawcheck sees broader trend
While Swift may not get all the credit for the surprisingly strong current state of the American economy, Ellevest founder and CEO Sallie Krawcheck sees a broader dynamic at play.
In an interview at the New York Stock Exchange on January 30, Krawcheck explained his views to TheStreet editor-in-chief Sara Silverstein.
“Why don't we go into recession in 2023?” —Silverstein asked.
“The answer is women. It's women,” Krawcheck said. “Women assume their financial and economic power and have fun.”
“Go see Barbie at the movies, see Beyoncé, see Taylor Swift, and in doing so, spend money and unleash economic power,” he continued. “That means going out for drinks before going to see Taylor Swift and staying in a hotel. All of this helps stimulate the economy and keep us out of the recession.”
Krawcheck spoke of the opportunity for women to exercise their spending freedom in this way as part of a larger reality.
“The other big thing that happened last year and this year is that women are having fun with money after so many decades of saying, 'Oh, I feel so ashamed of money,' and 'Oh my God, I bought the coffee.' Milky'”. ,'” she said.
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Krawcheck talks about women and financial power
The founder of Ellevest analyzed some context around these realities related to the pressures that women have traditionally felt.
“You know, the experts are telling me that I'm not going to be able to pay for my retirement because I had the damn latte this morning, after so long of this shame around money and that money is something hidden and shameful,” Krawcheck said. . “Women have fun with this.”
“And math for girls, whether you agree with math or not, is fun,” she added. “Budgeting out loud, talking about money, and talking about budgets is fun. All of this is starting to come out from under the curtains or wherever they've been swept away, and women are really feeling their economic and financial power.”
Ellevest, founded in 2014, describes itself as an investment platform made for women and by women.
Prior to Ellevest, Krawcheck's career on Wall Street included roles such as CFO of Citigroup. (c) and head of its Asset Management Division.
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