Forget Taylor Swift — recession was thwarted by larger trend

Going into 2023, a prevailing sense of conventional wisdom among economists, journalists and finance leaders was that the U.S. economy was about to descend into recession.

Experts believed that, for one, the interest rate increases implemented by the Federal Reserve in 2022 in its efforts to slow inflation would inevitably drag the economy down.

Related: Delta, United and American Airlines have a pricing trick few know

"The MBA forecast calls for a recession in the first half of next year, driven by tighter financial conditions, reduced business investment and slower global growth," wrote the Mortgage Bankers Association on Oct. 24, 2022. 

Then, on Nov. 18, 2022 The Economist published a story with the headline, "Why a global recession is inevitable in 2023."

It did not happen. In fact, the U.S. economy grew during 2023. And there are a number of theories as to why those gloomy predictions turned out to be wrong.

Most prominent of those is that the job market unexpectedly remained mostly strong during 2023 and unemployment stayed low.

And as inflation steadily fell, investors warmed to the idea that the Fed would slow interest rate hikes and might even begin cutting them again in 2024. The stock market rallied to record highs.

There were other widely reported opinions about what kept the economy out of recession.

One popular belief was that the Taylor Swift Eras Tour — which was mentioned by the Federal Reserve Bank of Philadelphia's Beige Book in its assessment of the city's suddenly strong hotel revenue — was saving the U.S. economy by increasing demand.

But even if estimates in the $5 billion range on the total economic impact of the Taylor Swift tour turn out to be accurate, the U.S. economy is too expansive to give it all the credit.

"There's no denying that the Eras Tour is a cultural phenomenon, but the impact of the tour is not the sole reason the United States has avoided a recession thus far," wrote Recruitonomics on Aug. 10, 2023. "Instead, the high demand for and impressive spending around her tour contributes to the larger trend of massive consumer spending that has kept the U.S. afloat."

Ellevest CEO Sallie Krawcheck views a larger trend

While Swift may not get all the credit for the current surprisingly strong state of the U.S. economy, Ellevest Founder and CEO Sallie Krawcheck sees a larger dynamic in play.

In an interview at the New York Stock Exchange on Jan. 30, Krawcheck explained her point of view with TheStreet Editor-in-Chief Sara Silverstein.

"Why didn't we go into a recession in 2023?" Silverstein asked.

"The answer is women. It's women," Krawcheck said. "Women stepping into their financial and economic power and having fun."

"Going to see Barbie at the movie theater, seeing Beyonce, seeing Taylor Swift, and in doing so, spending money and unleashing economic power," she continued. "That means going out for drinks before going to see Taylor Swift, staying in a hotel. All of it helps spur the economy and keep us out of recession."

Krawcheck talked about the opportunity for women to exercise their spending freedom in these ways as part of a more important reality.

"The other great thing that happened last year and into this year is women are having fun with money after so many decades upon decades of, 'Oh, I feel so ashamed about money,' and, 'Oh my gosh, I bought the latte,'" she said.

Krawcheck talks about women and financial power

The Ellevest founder discussed some context around these realities related to pressures women have traditionally felt.

"You know, the pundits are telling me I'm not going to be able to afford my retirement because I had the frigging latte this morning, after so long of that shame around money and the money being a hidden thing and a shameful thing," Krawcheck said. "Women are having fun with it."

"And the girl math, whether you agree with the math or not, is fun," she added. "The loud budgeting, talking about money and talking about budgeting is fun. All of this is starting to come out from under the curtains or wherever they were swept, and women are really feeling their economic and financial power."

Ellevest, founded in 2014, describes itself as an investing platform made for women, by women. 

Before Ellevest, Krawcheck's Wall Street career included roles such as chief financial officer of Citigroup  (C)  and chief of its Wealth Management Division.

Related: Veteran fund manager picks favorite stocks for 2024