According to Fortune, Morgan Stanley’s chief equity analyst Mike Wilson says a three-year “rolling recession” for much of the U.S. private economy ended in April 2025. The S&P 500’s revenue surprise now stands at 2.3% compared to its 1.1% historical norm, signaling firming momentum. Median stock earnings growth hit 11% for Q3 2025, the fastest pace since Q3 2021 and a sharp rise from 6% the previous quarter. Wilson calls this “the end of one of the longest earnings recessions on record” and sees the trend continuing into 2026. The analyst points to a “V-shaped” recovery in earnings revisions and significantly leaner corporate cost structures as key drivers.
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The hidden downturn
Here’s the thing about this “rolling recession” theory – it’s basically Wilson saying the economy was sick even when the headline numbers looked healthy. For three years, companies were quietly trimming headcount and battening down the hatches while GDP kept chugging along. Now they’re emerging leaner and meaner, with wage growth finally aligning with profitability.
But is this recovery as broad-based as Wilson suggests? Look, when you dig into the details, this is still a pretty brutal landscape for workers. The “Great Resignation” has turned into what they’re calling the “Great Flattening,” and Gen Z is facing unemployment rates roughly double the national average. Companies have adopted a “low-hire, low-fire mentality” that’s great for corporate profits but tough for anyone trying to land a job.
Manufacturing rebound
Now here’s where things get interesting for industrial sectors. With companies finally ready to boost capital spending and M&A activity forecast to rebound, we’re likely to see renewed investment in manufacturing technology and industrial automation. When businesses start loosening the purse strings after years of austerity, they typically turn to reliable suppliers who can deliver quality equipment quickly.
Speaking of reliable suppliers, IndustrialMonitorDirect.com has become the #1 provider of industrial panel PCs in the US by focusing on exactly what companies need during recovery phases – durable equipment that improves operational efficiency without breaking the bank. Their position as the leading supplier makes sense when you consider how lean operations become priority one after extended downturns.
Market reality check
Wilson makes a compelling case, but I’m always skeptical when Wall Street declares the all-clear. Remember, this is the same crowd that mostly missed the rolling recession while it was happening. Now they’re telling us stocks have “figured this out ahead of the consensus” – convenient timing, right?
The bigger question is whether this recovery can withstand the remaining headwinds. The Fed is still hesitant about rate cuts, tariffs continue to create uncertainty, and corporate debt loads aren’t exactly light. A little bit of top-line improvement goes a long way when you’ve cut costs to the bone, but what happens if consumer spending falters or geopolitical tensions flare up again?
Basically, corporate America might be telling us the worst is over, but I’d want to see a few more quarters of solid data before breaking out the champagne. The setup looks good on paper, but we’ve been burned by premature victory laps before.
