How CEOs view recession possibilities in 2023

Different CEOs attending the 2023 World Economic Forum (Davos, Switzerland) share their thoughts on how to move forward in 2023.

Video Transcript

SEANA SMITH Investors are not just concerned about the risk of default but also about the possibility that the economy will be in recession over the next few quarters. Yahoo Finance surveyed a variety of business executives who attended the World Economic Forum in Davos to find out about the possibility and how they see their businesses. Let’s have a listen.

GARY COHN Everyone talks about recessions. However, I find that most people are positive about their businesses when I ask them questions. Everyone here seems to think that the other person is having a problem.

– Mild recession. A few quarters down, then back up to slightly more normal in 24 and into ‘25.

– I don’t think we are far enough into recession.

– There will be areas of the world that fall into recession in this year’s global economy. However, we will ignore the recession in those areas that have been experiencing continued growth.

SEANA SMITH I found this to be quite optimistic. It feels like we have been talking like broken records about the threat from a recession for the past few months. These comments are very optimistic when you compare them to the surveys and reports that we have gotten from Davos.

One survey from the Forum, which is comprised chief economists, stated that 2/3 of them expect a global recession in this year’s economic cycle. PWC conducted a survey and it was the most pessimistic ever.

RICK NEWMAN These same people have been saying the exact same thing for nine months. So since June saw inflation hit 9%, economists, multiple economists and many business people have said that they believe this will only lead to a recession in six to nine months. It doesn’t happen.

We are now trying to convince ourselves that there is a recession. It might happen. Look at the job market. You will notice something very different in the economy than with other cycles.

There are many signs that indicate a slowdown, such as a low unemployment rate and incredible job growth. But it doesn’t seem to be happening. I don’t know how to respond. It’s what I meant.

DAVE BRIGGS Another thing I believe is that part of it all depends upon how you define recession. In fact, we have already reached the technical definition. Let’s forget about that and just look at the present circumstances. To your point. Historical low unemployment of 3.5% Every month, there is more job creation. The consumer continues to spend.

You can only point to the decline in earnings. Rick, your point is valid. It’s possible that we are talking ourselves into a recession instead of noticing and observing both the resilience and hot employment market. Employers have said that they will continue to retain their employees. We don’t want them to go.

RICK NEWMAN One final thought: We could experience a recession without really noticing. It’s possible to have a mild recession that doesn’t seem like a real recession. The financial position of people is good, and people don’t take out terrible loans that they can’t pay back.

The housing market is not likely to burst like it did in 2008-2009. It’s possible that we have a little boost in the economy, and then we continue to motor along. This would help a lot with inflation, bringing it down.