The Conference Board survey found that 98 percent of chief executives are preparing for a recession in the next 12 to 18 months in the United States.
Eighty-one percent of CEOs noted that general economic conditions have worsened from six months ago, and 74 percent anticipate that conditions will weaken over the next six months. More than half (52 percent) noted that conditions in their own industries were in worse condition to start the fourth quarter, while 54 percent expect short-term prospects to soften in their own industries during the next half-year.
“CEO confidence sunk further to start the fourth quarter and is at its lowest level since the Great Recession,” Dana M. Peterson, chief economist of The Conference Board, stated in the report. “CEOs’ view of current conditions as well as their expectations deteriorated.”
While there is almost universal certainty that a recession will occur in 2023, the magnitude of the next economic downturn is most notable. According to the latest quarterly assessment, 85 percent of respondents think a brief and shallow U.S. recession with limited global spillover is the most likely scenario.
‘Batten Down the Hatches’
Following the release of Goldman Sachs’s third-quarter earnings report, the investment bank’s CEO, David Solomon, told Reuters that “there’s a reasonable chance of a recession,” although he “could still see a scenario with a soft landing.”That caught the attention of Amazon founder Jeff Bezos, who shared Solomon’s comments by tweet and remarked that “the probabilities in this economy tell you to batten down the hatches.”
“Because of the size of the issues we are dealing with, it’s not something we are used to because of its magnitude,” he said. “They’ve produced this giant lurch forward, and now will raise interest rates to the point that there’s enough economic pain and financial market pain to deal with that.”
“These are very, very serious things which I think are likely to push the U.S. and the world—I mean, Europe is already in recession—and they’re likely to put the U.S. in some kind of recession six to nine months from now,” he said.
“The first two quarters of real GDP negative, to us, means we’re in a recession. We believe this recession will be sustained,” Wood recently told Yahoo Finance Live, adding that a contributing factor will be “a serious inventory correction.”
“Making macroeconomic prognostications is a recipe for disaster, but my guess is that we are past peak inflation and that we will have a recession,” he stated. “I’m just guessing here, this is total speculation. But I would guess it’s a mild recession for, I don’t know, 18 months or something like that.”
“The fact that, you know, we are being a bit more responsible through one of the toughest macroeconomic conditions underway in the past decade, I think it’s important that as a company we pull together to get through moments like this,” he said. “We don’t get to choose the macroeconomic conditions always.”
What Do the Numbers Show?
The Federal Reserve Bank of Atlanta’s GDPNow estimate suggests that the U.S. economy expanded 2.9 percent in the third quarter, up from the model’s 0.3 percent projection at the end of September.But that doesn’t mean conditions have significantly improved. From Corporate America to economists to market analysts, the consensus is that another recession is on the horizon.
“This raises the risk that emergency savings could be needed by households in the coming months, much the same as it was needed or would have been useful during the early days of the pandemic, when 22 million jobs were lost in just two months’ time,” Mark Hamrick, Bankrate’s senior economic analyst, said in the report. “We don’t expect anything nearly so severe, but the economy is at some risk here.”
Over the past month, plenty of data have been pointing to a slowing economy.
These numbers have been reported as the annual inflation continues to be elevated at a hotter-than-expected 8.2 percent. The core inflation rate, which excludes the volatile energy and food industries, rose to 6.6 percent.
