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Businesses ‘Extremely Cautious’ Heading Into 2023
By Emel AkanDecember 20, 2022 Updated: December 20, 2022
Epoch Times
The question of whether or not the U.S. economy is in recession remains one of the most hotly debated topics of 2022, yet corporate America is bracing for a slump in consumer spending. As high inflation depresses consumer demand, businesses of all sizes expect the economy to worsen in 2023.
Consumer spending has kept the U.S. economy afloat over the last year, but it is unclear whether this pace of spending will be sustained in the coming year as household budgets become further stressed.
Bank deposits have fallen by $340 billion since their peak in April, indicating a weakening savings buffer. The personal savings rate as a share of disposable income fell to a 17-year low of 2.3 percent in October. And consumers are increasingly turning to credit cards to make ends meet in the face of rising prices.
With household budgets squeezed and Americans signaling future spending cuts, business leaders are worried about a dip in revenues and the need to lay off personnel.
Profit outlook for S&P 500 companies also reflects the economic weakness ahead. Analysts now expect fourth-quarter earnings to fall by 2.8 percent, according to FactSet. This would be the first drop since the third quarter of 2020, when the pandemic was at its peak. In the last five years, average profit growth of S&P 500 companies was 14.3 percent.
“If a recession is coming in 2023, it will be the most widely anticipated recessions of all times,” Ed Yardeni, president of Yardeni Research said in a note. “It would be the first time that we’ve collectively talked ourselves into a recession,” he said, adding that some of the most vocal pessimists are bankers.
Executives of the largest U.S. banks are warning that rising prices would dampen consumer spending, which makes up around 70 percent of the U.S. GDP.
“Economic growth is slowing,” Goldman Sachs CEO David Solomon said on Dec. 6 at a conference hosted by the investment bank. “When I talk to our clients, they sound extremely cautious."
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This is the price you made ALL OF US PAY.
Remember who had things humming like a well tuned car.
You hated that.
You gave US THIS and convinced US that it would be better than Trump.
But you only exposed yourselves as incompetent, disloyal liars who only want power and to have total control over US.
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