Corporate earnings calls are no longer littered with talk of recession.
Mentions of "recession" are set to fall for a fifth straight quarter, new data from FactSet showed, and reach the lowest level since the fourth quarter of 2021.
Through last Friday, 470 members of the S&P 500 had reported quarterly results and 53 had mentioned recession. That's down from 237 at this cycle's peak in the second quarter of 2022 and 61 in the prior quarter.
The five-year and 10-year average number of recession mentions from S&P 500 companies stand at 84 and 60, respectively.
However, FactSet noted in its report the team is searching for the word "recession," not "slowdown" or other buzzwords that could signify overall weak consumer demand moving forward.
A sampling of recent retail earnings shows that while companies aren't talking about a recession explicitly, they aren't exactly projecting there will be no hit to the "resilient consumer" narrative that led the 2023 economic story, either.
Last week Walmart (WMT) shares traded lower after the company issued a cautious sales forecast.
On Tuesday, both Lowe's (LOW) and Best Buy (BBY) stock slipped as the home improvement retailer said its sales will be worse this year than expected, while the consumer electronics store said demand has been "uneven and difficult to predict."
None mentioned recession directly, but the point is clear: Even if consumer spending doesn't fully erode it's certainly being negatively impacted.
Still, the narrative fits with the shifts recently seen in how Wall Street as a whole is talking about a slowdown.
A recession in 2023 was once a consensus call among Wall Street strategists. That's not fully the case anymore.
Many in the market are now pricing in a "soft landing," in which inflation retreats to the Federal Reserve's 2% target without the economy tipping into recession.
Goldman Sachs chief economist Jan Hatzius recently published the firm's 2024 outlook, which includes a 15% chance for a recession next year, in line with the US economic history that has seen a recession occur about once every seven years.
And Goldman isn't alone. Earlier this year, the Federal Reserve's staff dropped forecasts for a recession in 2023, while Bank of America's economics team also pulled its call for a downturn as the US economy defied expectations through the second and third quarters of this year.
Much of these revised narratives have centered a consumer holding up far better than most expected, with consumption powering the US economy to its fastest quarter of growth in nearly two years during the third quarter of this year.
And Hatzius believes this trend won't necessarily end in 2024 as real personal income, or the income consumers see after adjusting for inflation, has been trending higher as inflation has moderated.
"[The real disposable savings rebound] should be sufficient to keep consumption growing at an OK pace, 2% or so," Hatzius said. "Nothing super rapid, but moderate growth would be my expectation, even with reduced excess savings."
Josh Schafer is a reporter for Yahoo Finance.
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