The biggest economic debate of 2023 is whether the U.S. is heading toward a recession. And the reason it’s being debated is because the data shows evidence for both sides. In the no-recession camp, the economy grew by 2.9 percent last quarter, besting analysts estimates, and inflation slowed for the second straight month in December. And while we’ve seen big headlines on corporate layoffs, these job losses aren’t yet reflected in the data. Jobless claims for the first three weeks of January were near record lows.

The annual World Economic Forum gathering in the mountainside retreat of Davos, Switzerland, is most commonly described with a single word: elite. After attending the meetings last week, I’d like to offer three more words that perhaps more constructively capture the ethos of Davos this year: Optimism, dealmaking, and hope.

Last week, data for December showed that the rate of inflation had fallen to 6.5 percent from 7.1 percent a year earlier. The decline was driven mainly by a steep drop in gas prices. While overall inflation might (thankfully) be losing steam, workers, especially those with smaller paychecks, continue to suffer an erosion of the pay gains they reaped during 2022’s tight labor market.