It is just a reality that unexpected developments will occur that force us to reassess the outlook. The outset of COVID-19 or the timing of the Global Financial Crisis (GFC) are more extreme example of this. However, in practice, many different shocks will hit the economy over time, from floods or droughts to international events or changes in technology.
Business managers, with little opportunity to raise prices, have moved aggressively to stabilize cash flows by trimming workforces. These efforts have limited any rise in unit costs, attenuated the pressure on profit margins, and ultimately helped to preserve the vast majority of private-sector jobs.