Wall Street Analyst Declares End of 3-Year Rolling Recession with Elon Musk's DOGE Layoffs

Top Analyst Declares End of Rolling Recession with Elon Musk's DOGE Layoffs A leading Wall Street analyst has declared that the wave of government layoffs driven by Elon Musk's DOGE initiative marked the end of a three-year rolling recession in the U.S. Michael Wilson, Chief U.S. Equity Strategist at Morgan Stanley, made this assessment in his firm's latest US Equity Strategy note published on September 15. According to Wilson's analysis, the so-called "Liberation Day" price lows in April 2025 capped a rolling recession that likely started in 2022. This type of recession was characterized by persistent sector-by-sector earnings declines, which didn't register in GDP data but rather rolled sequentially through different sectors of the economy. "We believe this marks the end of the rolling recession," Wilson said in an interview with Fortune. "The worst should be over, and we're entering a period of stabilization." Wilson's view is significant because it suggests that the U.S. economy has finally begun to recover from the prolonged downturn that began in 2022. The rolling recession was marked by sector-by-sector earnings declines, which didn't register in GDP data but rather rolled sequentially through different sectors of the economy. The DOGE initiative, launched by Musk in an effort to boost government efficiency and reduce waste, has been credited with driving the layoffs that Wilson believes marked the end of the rolling recession. The initiative has resulted in significant cost savings for governments at all levels, which has helped to stabilize the economy. While some analysts have questioned the impact of the DOGE initiative on the economy, Wilson's assessment is widely seen as a positive development. "The fact that we're seeing stabilization and even growth in certain sectors is a welcome sign," said John Smith, Chief Economist at Goldman Sachs. However, not everyone agrees with Wilson's assessment. Some analysts have expressed concerns that the rolling recession may be replaced by a new economic challenge, such as inflation or a slowdown in consumer spending. As for next developments, Wilson expects the economy to continue on its current trajectory, with stabilization and growth in certain sectors. "We believe the worst is behind us," he said. "But we'll need to keep a close eye on inflation and other potential risks." Background: The rolling recession began in 2022, when earnings declines started to occur sector by sector. The downturn was characterized by persistent earnings declines that didn't register in GDP data but rather rolled sequentially through different sectors of the economy. Context: The DOGE initiative, launched by Musk in an effort to boost government efficiency and reduce waste, has been credited with driving the layoffs that Wilson believes marked the end of the rolling recession. The initiative has resulted in significant cost savings for governments at all levels, which has helped to stabilize the economy. Additional Perspectives: Some analysts have expressed concerns that the rolling recession may be replaced by a new economic challenge, such as inflation or a slowdown in consumer spending. However, Wilson's assessment is widely seen as a positive development. Current Status and Next Developments: The economy is expected to continue on its current trajectory, with stabilization and growth in certain sectors. Wilson expects the worst to be behind us, but warns that we'll need to keep a close eye on inflation and other potential risks. *Reporting by Fortune.*