Discussion around the potential for a recession is becoming less common among American business executives. Ever since the Federal Rserve began raising interest rates in early 2022, corporations and investors have braced for how a recession might play out. Now, the topic is losing its luster on earnings calls held by the largest U.S. companies as it becomes increasingly likely that inflation has been cooled without causing an economic contraction. The word recession came up on the fourth-quarter earnings calls of 47 companies in the S & P 500, according to market data platform FactSet. That’s the lowest number since the end of 2021. Another way of looking at it: Compared with the same three-month period a year ago, the word was mentioned on less than one-third of the number of calls. And despite coming off a period plagued with economic concerns, the fourth-quarter stat came in below the five- and 10-year averages of 85 and 61, respectively. Sweeter chatter When recession chatter did come up, the tune was often sweeter. Executives pointed to a better macroeconomic environment than what they saw in prior quarters. Everyone “seems to be more optimistic this time this year compared to this time last year,” said John Wall, the finance chief of technology company Cadence Design Systems . “At this time last year, everyone was asking me, ‘When was the recession going to happen?'” The gross domestic product grew at a rate of 3.2% in the final quarter of 2023. While down from the prior three-month period, the measure of all goods and services clearly showed the economy dodging a recession once considered all but unavoidable. Cadence’s Wall isn’t alone in his confidence. Almost half of the more than two dozen finance chiefs surveyed by CNBC said they expect the Federal Reserve to control inflation without a recession, a scenario known as a soft landing. Another nearly 15% of respondents to CNBC’s CFO Council survey said they believed a recession had already taken place….
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