US Economy I: On the Road Again.
Taylor Swift’s “The Eras Tour” was her sixth tour. It started on March 17, 2023 in Glendale, Arizona and concluded on December 8, 2024 in Vancouver, British Columbia. My “Roaring 2020s Tour” started in California at the end of January 2024. My latest stops were in Georgia and Tennessee last week. Next week, I’ll be in Las Vegas and Houston.
My tour has been well received, though not as well as Taylor’s. My main Roaring 2020s themes are the following:
(1) Resilient economy. We should be impressed by how well the US economy has grown over the past three years despite the significant tightening of monetary policy. The most widely anticipated recession of all times has been a no-show, attesting to the resilience of the economy. That increases the chances that the current economic expansion, which began in Q3-2020, will continue for longer than it has lasted so far; maybe there will be no recession through the end of the decade. Perhaps the Roaring 2020s will even be followed by the Roaring 2030s.
Real GDP has increased 23.5% since Q2-2020 (the bottom of the two-quarter recession) through Q4-2024 (Fig. 1 below). The full recovery from the recession in early 2020 took only 20 months, one of the shortest recovery periods on record (Fig. 2 below). The post-recovery expansion has lasted 38 months so far through the end of 2024. We think it could last at least as long as the 1990s expansion (i.e.,105 months) in our Roaring 2020s scenario. It could be even longer if the 2030s also roar.
