Main Financial Indicators have been warning us of a recession for a very long time. For 15 straight months, actually, which is the second longest streak of year-over-year declines.

Regardless of all of the warnings and regardless of the Fed making an attempt to sluggish the economic system, it continues to march on:

• The unemployment fee has been beneath 4% for twenty straight months.
• We’ve added 2.4 million jobs in 2023.
• S&P 500 Q3 earnings present a 2.7% y/o/y change, which might be the primary optimistic studying since Q3 2022. Combination earnings should not too far beneath a document excessive.

I don’t know if the LEI shouldn’t be precisely capturing the present economic system or if it’s simply taking a very long time for fee hikes to filter by the economic system. Each might be true, however maybe a greater place to search for clues in regards to the economic system’s trajectory is in promoting spending.

Promoting is among the best levers firms can pull if they’re making ready to hunker down. Promoting slows earlier than you fireplace individuals, and promoting may be dialed down faster than investments can. Based mostly on latest earnings experiences, there isn’t any signal that firms are making ready to hunker down.

Meta’s promoting, which represents 98.5% of their total income, hit an all-time excessive in Q3, rising at a blistering 23.5% y/o/y, and 6.8% q/o/q. Google’s promoting grew  9.4% y/o/y and a couple of.6% q/o/q. Even Snap, which has had a troublesome time rising its advert income, grew 5% y/o/y.

Companies are nonetheless spending and shoppers are too. On Visa’s most up-to-date earnings name, the CEO mentioned: “All year long, we’ve got seen resilient shopper spending.”

Mastercard’s CEO mentioned one thing related: “In your query round how we see This fall shaping up, it’s truly very a lot according to what I shared which is our base case state of affairs continues to be one in all the place the patron stays resilient.”

There are many areas within the economic system which are previous signaling a recession. The housing marketplace for instance is in a full-on recession. Some areas of the posh market are seeing a slowdown. I’m not saying the economic system is booming, though GDP would say it’s, but it surely’s undoubtedly not as dangerous as individuals really feel it’s.