Analysts at Yardeni Research characterize the U.S. economy over the past several years as "shock resistant," observing that it has absorbed a string of severe challenges without slipping into a protracted recession. In a note, the team, including Ed Yardeni, said the economy has "performed remarkably well" since 2020 despite pressures that, in their view, "would have felled a less resilient economy."
They pointed to the initial pandemic-related contraction, brought on by government-mandated closures in early 2020, as an important benchmark: while it produced a downturn, that episode was the shortest recession in U.S. history. According to the Yardeni analysts, the period that followed produced what they call "the most widely anticipated recession that never happened."
The analysts list a sequence of disruptive forces that the economy has endured. These include supply-chain dislocations, a period of rapidly rising inflation and the monetary policy response to that inflation, a brief banking crisis, the war in Ukraine, and what they describe as President Donald Trump’s aggressive tariff agenda. They also note a record-long federal government closure that lasted into November, along with a hiring environment that they characterize as tepid.
Despite this litany of shocks, the Yardeni team argues the U.S. did not experience a deep, prolonged downturn comparable to the global financial crisis of nearly two decades ago. Their assessment rests on the observable endurance of economic activity through multiple quarters of stress and subsequent rebounds.
On consumer behavior, Yardeni responds to recent worries that a falling national saving rate might leave consumer spending unsustainably reliant on dwindling buffers. They suggest that explanation is likely misplaced in whole: as more Baby Boomers enter retirement, many are doing so with substantial savings and investment balances. Those households, the analysts say, can maintain spending even as labor income declines, because "they have little need to save. That results in a falling saving rate."
The note also addresses concerns about the private debt market and the possibility that it could tighten, creating credit access problems for borrowers. Yardeni calls such worries "legitimate" yet contends that the systemic risk to the broader financial system may not be rising. Their reasoning rests on the expectation that a freeze in private credit markets would trigger a rapid policy response from the Federal Reserve: "That’s because if the private debt market were to freeze up, the Fed no doubt would swiftly provide an emergency credit facility to avert an economy-wide credit crunch," the analysts wrote.
Recent official data cited by Yardeni showed the U.S. economy expanded by 1.4% in the fourth quarter, with growth weighed down in part by the federal government closure that ended in November. On a year-over-year basis, the economy grew by 2.2%, a result Yardeni attributes to stronger readings in the second and third quarters of 2025.
What this means for markets and sectors
The Yardeni analysis highlights several forces that bear on consumer spending patterns, financial market functioning, and policy sensitivity. Their view of retirees drawing on accumulated assets is especially relevant for consumption-dependent sectors, while their assessment of potential Fed action speaks directly to the banking and credit markets.