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The economy is just getting stronger, not weaker, and ‘we in the economics profession need to look ourselves in the mirror,’ top analyst says​

Nick Lichtenberg
Updated Thu, 2 October 2025 at 2:36 AM SGT
5 min read

Jerome Powell sees a “low-hire, low-fire” environment.
One of Wall Street’s most closely watched voices delivered a blunt message to peers and policymakers: The U.S. economy is not faltering—it is accelerating. Torsten Sløk, chief economist at Apollo Global Management, said forecasts of an imminent slowdown have been repeatedly wrong, and the economics profession should start grappling with its track record of misjudgments.

“The consensus has been wrong since January,” Sløk said in a note circulated to clients Wednesday morning, adding that the average of economists’ forecasts has said the U.S. economy would slow down for nine months running. “But the reality is that it has simply not happened … We in the economics profession need to look ourselves in the mirror.”

Growth defies expectations​

Second-quarter GDP expanded at a 3.8% annualized rate, a strikingly strong pace given the Federal Reserve’s ongoing effort to tamp down inflation. The Atlanta Fed’s GDPNow model suggests growth may be even stronger in the third quarter, forecasting 3.9% gains. Many economists had expected the lagging impact of high interest rates, tighter credit conditions, and April’s “Liberation Day” market shock to drag growth meaningfully lower by now.

 

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Instead, the data tells a different story. Consumer spending has continued to prove resilient, and business investment, far from retreating, has strengthened in sectors tied to artificial intelligence, energy infrastructure, and manufacturing reshoring. Housing, often sensitive to interest rates, has shown surprising stability in key regional markets. Sløk did not dive into these particulars in Wednesday’s edition of his Daily Spark, except to address slowing job growth. “This is the result of slowing immigration,” he wrote, not economic weakness.

“The bottom line is that the U.S. economy remains remarkably resilient,” Sløk emphasized. “It is becoming increasingly difficult to argue that we are still waiting for the delayed negative effects of what happened six months ago,” referring to President Trump’s Liberation Day and the imposition of sweeping reciprocal tariffs. One top analyst has been arguing for years that most of Wall Street was wrong, and that Liberation Day represented the end of the beginning, rather than the beginning of the end.

 

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Rolling recovery underway?​

Morgan Stanley’s chief U.S. equity strategist, Mike Wilson, has coined a phrase to describe what’s been happening in the economy for roughly three years: a “rolling recession.” The economy has been quietly weathering recession-like conditions since sometime in 2022, Wilson has argued throughout, with a recession not being picked up by conventional measurements but rather rolling through different segments of the economy, one at a time. Wilson contends headline figures such as GDP and unemployment missed serious underlying struggles, including an 80% collapse in hiring over the summer and persistently negative median-earnings growth.

Although neither he nor Sløk has noted how their readings of the economy intersect, Wilson believes the economy bottomed out last spring—coinciding with the White House’s Liberation Day crackdown on tariffs. Federal employment was the one area not affected by the rolling recession, he noted, until Elon Musk’s DOGE initiative remedied that rather dramatically.