Looking ahead

Question: How might 2023 play out from a macroeconomic perspective?

Steve Chiavarone: The macro-environment can seem confusing because you do have some conflicting signals depending on how you're measuring it. Housing is weakening, manufacturing is weakening. We're seeing some of those classic signs of recession, but you do have this robust or resilient labor force. That's actually not that inconsistent with history. It takes time for the labor market to weaken it. It tends to follow some of those other indicators. And on average, the stat is, is that you generally aren't in recession until six months after you've seen the low in unemployment. And we just saw the low in unemployment back in the February reading. And so we expect, and then we think we're starting to see the signs of a gradual weakening in the labor force that will bring an economic slowdown more into focus. I think this is just a matter of time. And that's been the issue over the last couple of years. What's defined this cycle so far, after many cycles that were very severe, but very short-lived and very quick, this one has taken longer to play out in every stage. And so, that's why we look at it and say, 'This is a market environment where the virtues of humility and patience are the ones that win the day.' There will be a day to be bold and to be brave, we think that day comes later.