U.S. businesses are starting to feel the chills of a looming recession as executives at companies such as JPMorgan Chase, retail giant Walmart and United Airlines paint a grim economic outlook for next year.
Businesses plan to slow hiring and capital spending over the next six months as borrowing costs rise sharply, according to a survey of top U.S. CEOs this week by the Business Roundtable.
The U.S. Federal Reserve’s relentless war against decades-high inflation is disrupting the economy through aggressive interest rate hikes, forcing companies to cut earnings forecasts and curb expenses. .
JP Morgan Chief Executive Jamie Dimon has warned of a “mild to severe recession” next year as a slowing economy and runaway inflation hit consumer spending, while United Airlines’ Scott Kirby warned that demand for air travel would plateau, demonstrating “pre-recession behavior,” he said in an interview.
“CEO’s cautious comments on 2023 outlook at a time of great uncertainty about how much the Fed’s fight against inflation will slow the economy,” said Arthur Hogan, chief market strategist at B. Riley Wealth. is logical,” he said.
Several of America’s largest banks have already warned the economy in notes to clients, with some predicting a slowdown and others suggesting a full recession.
A Reuters poll of economists released this week showed that U.S. economic growth was expected to slow to 0.3% in 2023 after rising 1.9% this year. It also suggests he has a 60% chance of a US recession next year.
Tesla CEO Elon Musk said in October that the recession would last until spring 2024. Walmart Chief Executive Doug McMillon told CNBC that a recession may be the evil needed to moderate inflation for budget-conscious customers.
The Wall Street Journal reports that Pepsi is laying off hundreds of employees at its headquarters, with tech giants to consumer companies cutting jobs to keep costs down in preparation for an uncertain outlook. up to and may join the list of companies.
Signs of an economic slowdown have led U.S. firms and brokerage firms that cover them to cut earnings expectations, and the S&P 500 could see its fourth quarter profit fall for the first time in two years.