Morgan Stanley Predicts Soft Landing Economy 2023 (A Few Thoughts....)

Morgan Stanley came out with a few insights this year. A Soft Landing for the U.S. Economy?

Key Takeaways:

• Morgan Stanley Research believes the U.S economy can achieve a “soft landing,” which means slowing economic growth while avoiding a recession. 
• The U.S. housing cycle, income and spending trends, a stable labor market and receding inflation point to a positive outcome. 
• However, banking-sector turmoil and a resulting credit squeeze still pose some recession risk.

A few thoughts.....

This is year is interesting because we are a few years past COVID but about at the point where companies have implemented long-term strategies post-Pandemic that include a more online Digital Era approach. Unemployment is low, interest is high but declining, investment market is rising, and the risk of recession is declining. My biggest focus is whether there will be a growth spurt toward the end of 23' and beginning of 24'. There was an economic boon after COVID which would indicate the theory was sort of correct on that front but now it is nearly 3 years later so that is a different story. A small recession might be expected but unless something odd happens we should see some growth. If lucky significant growth.

The other question that I keep in the back of my head is whether or not we are actually going through an economic platform shift?  (I don't know, its possible just like the printing press) If so we would have a fast ramp up of technology and innovation as fundamentals tied to new infrastructure coming online (i.e. Digital Era Renaissance. 2023/4 would be sort of where we see whole new lines of technology come out. Its not immediate but over a short period of time.). There is some indication of this in the increase in AI, EV. online education, fiber optics, cell phones, semiconductors, etc... Just like how the Internet produced significant wealth, the digital era will better blend these two planes of commerce to create faster innovation (i.e. small electric commuter carts, stronger space travel with new batteries, or new fuels. I still like the idea of electric molectular solar propulsion.  I'm being a little silly about it. Sorry. 😓 )

The other things that might be of interest is how the numbers act under different economic assumptions of the digital versus physical world assumptions of the Industrial Era. They use different assumptions and therefore there are going to be adjustments in how these numbers represent digital items versus physical items. Basically, many of these theories would need to be tweaked and adjusted as well as the development of whole new economic theories tied to the age. The theories must change when technology creates new human behavioral patterns of buying, interacting, and engage with the environment. (I'm sorry I'm a little out there in left field but who knows what we find. Most theories are only partially correct. That is why we debate them.)