With the prospect of a U.S. recession looming as we approach 2023, corporate America is bracing for a slowdown in consumer spending. On Tuesday, the chief executives of major companies including Walmart and General Motors joined TV talk shows to talk about inflation, interest rates, geopolitics and what it all means for their prospects in the new year. Here are their main points:
①JPMorgan Chase CEO Jamie Dimon: multiple bad news may lead to US economic recession
JPMorgan Chase CEO Jamie Dimon said in an interview,Rising interest rates, record inflation, geopolitical pressures and other factors could combine to cause a U.S. recession. Savings and government aid during the pandemic have helped keep consumers’ wallets steady, but inflation and rising interest rates are “eroding everything,” he said.
The chief executive did not expect the rise in U.S. consumer spending to last long in 2022, and highlighted the risks of rising interest rates as the Fed struggles to rein in inflation.
This year’s geopolitical turmoil, including the war in Ukraine and tensions with international trade, is also an “economic dark cloud” for Dimon to focus on. International trade in commodities such as oil will continue to become more expensive as the dollar strengthens, as weaker currencies are forced to match the difference, he noted.
“When you look ahead, these things could very well derail the economy and cause what people fear is a mild to severe recession. It could also be a hurricane, we just don’t know,” Dimon said.
②General Motors CEO Mary Barra: The U.S. economy will face headwinds in 2023, but it is not currently in recession
GM CEO Mary Barra expects,The U.S. economy will face headwinds next year, but there are no recession alarms sounding yet. “I wouldn’t say the U.S. is in a recession right now, that’s for economists to judge. But right now, we’re still seeing pretty strong consumption in the U.S.,” she said in an interview.
Even so, the automaker is treading carefully, bracing for a potential collapse in demand, as the rest of the industry has seen. Some industries saw demand rise during the pandemic as consumers spent less on travel and services, only to be caught off guard when demand evaporated.
Barra said GM is preparing for a “pretty conservative 2023” on costs to avoid being caught off guard, but she still sees “pent-up demand” from the pandemic persisting. She also expects issues such as supply chain strains brought on by the pandemic to persist through 2023, despite improving each quarter.
③ Wal-Mart CEO Doug McMillon: Alleviating the consequences of inflation may trigger an economic recession
Wal-Mart CEO Doug McMillon doesn’t want a recession in the U.S., but he thinks it could be an attempt to cushion inflation.
“We have some more budget-conscious clients who have been experiencing inflationary pressures for months. Should the Fed do what it needs to do even though the U.S. economy has a much harder landing than we’d like? I think the inflation issue is Needs to be addressed.”
While spending at Walmart remains strong, McMillon found spending in specific categories, such as electronics and toys, more conservative.
④ United Airlines CEO Scott Kirby: The Federal Reserve may lead to a mild recession in the U.S. economy in 2023
United Airlines CEO Scott Kirby said his company entered the new year with optimism,But in 2023, the U.S. economy may experience a “moderate Fed-induced recession.”
Business travel is steadily rebounding from the pandemic-era collapse, but Kirby said travel demand is stabilizing, which could be a “pre-recession phenomenon”.
He also said the aviation industry was still grappling with the legacy of the pandemic, such as a shortage of pilots and expensive fuel.
United Airlines remains optimistic about the U.S. economic outlook as its revenue continues to rise. Kirby said the company’s “margins are approaching historically high levels.”
⑤ Lance Fritz, CEO of Union Pacific Railroad: Consumption is decreasing and the US economy is tightening
Shipping activity is slowing, a sign that consumer spending is falling and the U.S. economy is tightening, said Union Pacific CEO Lance Fritz.
“There’s been a clear slowdown in the housing market in the U.S., a clear slowdown in package packaging, and we’re seeing that in paper and package shipping,” he said.
Fritz left it to the Fed to decide whether putting pressure on consumers’ wallets — and potentially triggering a recession in 2023 — is worth slowing inflation. Spending and demand are sure to fall as interest rates continue to rise, he said.
He added: “The Fed is trying to hit us all with a slowing economy and damaged demand. That’s not good.”
Based on the above information, it can be seen that, on the whole, most CEOs believe that the economic development of the United States in 2023 will face a lot of obstacles, and there is a possibility of falling into an economic recession, the degree of which may be uncertain. This may intensify risk aversion in the market, thereby supporting gold prices, and investors need to keep an eye on it.
At 11:32 on December 7th, Beijing time, spot gold was quoted at US$1,771.71 per ounce.