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## Corporate Earnings Calls Show Decrease in Recession Mentions

Corporate earnings calls are experiencing a decrease in mentions of the word “recession” for the fifth consecutive quarter, according to new data from FactSet. This decline is expected to bring mentions to their lowest level since the fourth quarter of 2021.

The data from FactSet reveals that out of 470 S&P 500 companies reporting quarterly results, only 53 mentioned recession. This is a significant reduction from the peak of 237 mentions in the second quarter of 2022 and 61 in the previous quarter. The average number of recession mentions from S&P 500 companies over the past five years and ten years stands at 84 and 60, respectively.

While the report from FactSet focuses specifically on the word “recession,” it is important to note that other buzzwords that could signify an overall weak consumer demand are not being considered. This means that there could be underlying issues not directly related to a recession that are going unnoticed.

Even though companies are not explicitly discussing a recession, recent retail earnings suggest that there is concern about the impact on the “resilient consumer” narrative that has characterized the economic story of 2023.

This shift in language aligns with the changing perceptions of a possible slowdown in the economy. What was once a consensus call for a recession in 2023 among Wall Street strategists is no longer the case, with many now anticipating a “soft landing” instead.

The shift in narrative has also been reflected in the revised outlooks from financial institutions. For example, Goldman Sachs’ 2024 outlook only includes a 15% chance of a recession next year, while the Federal Reserve’s staff and Bank of America’s economics team have also revised their forecasts for a downturn.

Although these revised narratives are placing emphasis on a strong consumer, there are concerns about how this scenario will play out in 2024. The outlook for next year acknowledges the potential for moderate growth in consumption, despite uncertainties surrounding excess savings and a changing inflation landscape.

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The AI legalese decoder can aid in analyzing corporate earnings calls by reviewing the narrative around the use of specific legal terms related to economic conditions. It can process large volumes of documents and identify patterns and trends in the language used by companies, offering insights into how the market is evolving.

By employing AI legalese decoder, analysts and investors can gain a deeper understanding of the sentiments expressed in corporate communications, helping them make more informed investing decisions. The tool’s ability to analyze language nuances and identify potential risks or opportunities can provide valuable context for interpreting the data from FactSet and other sources.

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