Jim Cramer says the economy is stabilizing and can avoid a recession

CNBC’s Jim Cramer on Thursday said that the economy could be on pace for a soft landing, despite what Wall Street bears might believe.

“It doesn’t have to be a recession. The economy just needs to stabilize at a lower level, which I think is already starting to happen. This is the winning hand that nobody playing the recession parlor game seems willing to acknowledge, even as I bet it’s become the most likely outcome,” he said.

Stocks rose on Thursday, snapping the S&P 500’s longest losing streak since October. Fears about the possibility of a recession have rocked the market, putting stocks on pace to end the week in negative territory.

Cramer argued that Wall Street has needlessly scared itself into believing a recession is coming due to bearish economic commentary from bank executives, misconceptions about food prices that have actually come down and a labor shortage that is steadily resolving.

“Basically, the [Federal Reserve] doesn’t have to bring the pain if we inflict the pain on ourselves, and I think that’s exactly what we’re doing,” he said.

He added that there are other indications that the economy is cooling down, including the chip glut facing tech companies due to waning PC demand. U.S. consumers also are spending less in general, leading retailers to deal with inventory gluts of their own and selling their products to off-price retailers.

“You can say these are all one-off. Go ahead, go dismiss me as anecdotal, not empirical. But to me, the writing’s already on the wall,” Cramer said.