Every Single Business Leader Surveyed In New Poll Thinks A Recession Is Coming
shelves at Target
Smith Collection/Gado/Getty Images

American executives overwhelmingly believe that a recession will strike in early 2023, according to a new CNBC survey of chief financial officers released Thursday.

The United States economy shrank at a 1.5% annualized rate in the first quarter of 2022, with two consecutive quarters of negative growth constituting recession territory. According to CNBC’s most recent CFO Council Survey, executives are generally pessimistic about economic futures.

Most respondents — 68% — believe a recession will occur in the first half of 2023. “No CFO forecast a recession any later than the second half of next year, and no CFO thinks the economy will avoid a recession,” CNBC said of the 22 survey respondents.

More than 40% of CFOs believe inflation — which is currently near four-decade highs of 8.3% — is the main external risk factor for their business. Meanwhile, 23% point to Federal Reserve policy, and 14% point to the war in Ukraine.

The Fed hiked rates by 0.5% last month — the largest rate increase since May 2000 — in an attempt to curb rising price levels. The move followed a 0.25% rate hike from near-zero levels three months ago. As employment numbers remain robust, the central bank likely interprets a strong labor market as a sign that officials should forge ahead with their plan to raise rates throughout the year.

In terms of stock market futures, 77% of CFOs predict that the Dow Jones Industrial Average will plummet to 30,000 — a more than 9% drop from its current level — before reaching a new high. Nevertheless, 55% of respondents said that “energy will show the most growth among all sectors of the economy over the next six months,” according to CNBC.

Indeed, the Nasdaq — a technology-heavy stock index — has endured losses for most of the year, at one point enduring its worst selloff since the dot-com bubble in 2001. Silicon Valley behemoths such as Microsoft and Tesla are pausing new hires or weighing plans to dismiss portions of their staff. The CFOs polled by CNBC, however, broadly intend to increase rather than decrease headcount — a 54% to 18% margin.

The generally ominous outlook from American financial executives comes as multiple high-profile business leaders also warn of a looming economic downturn.

“You know, I said there’s storm clouds but I’m going to change it… it’s a hurricane,” JPMorgan Chase CEO Jamie Dimon said last week, adding that no one knows if the hurricane is “a minor one or Superstorm Sandy.” Exhorting other financial conference attendees to “brace yourself,” he remarked that his investment bank is “going to be very conservative with our balance sheet.”

Likewise, Tesla CEO Elon Musk told executives in an email that he has a “super bad feeling” about the economy. President Joe Biden responded to the top entrepreneur’s sentiment by pointing to job growth at unionized American automakers and jabbed at Musk, “lots of luck on his trip to the Moon.”

Growth prospects worldwide are also expected to be lackluster. Earlier this week, the World Bank cut its global growth forecasts for 2022 and warned of the “sharpest slowdown in 80 years.” In January, the international financial institution forecasted 4.1% economic growth for this year — yet in light of elevated inflation, lockdowns in China, the Russian invasion of Ukraine, and other phenomena, the forecast was revised to 2.9%.

A previous version of this article incorrectly stated that 77% of respondents believe a recession will occur in the first half of 2023. It should have stated 68%.

Create Free Account

Continue reading this exclusive article and join the conversation, plus watch free videos on DW+

Already a member?

Got a tip worth investigating?

Your information could be the missing piece to an important story. Submit your tip today and make a difference.

Submit Tip
Download Daily Wire Plus

Don't miss anything

Download our App

Stay up-to-date on the latest
news, podcasts, and more.

Download on the app storeGet it on Google Play
The Daily Wire   >  Read   >  Every Single Business Leader Surveyed In New Poll Thinks A Recession Is Coming