It’s shaping up to be a strange economic downturn for some corporate leaders. Strong consumer spending, a better-than-expected jobs report, and cooling inflation are leading some CEOs to see good economic news even amid fears of a recession.
“The word ‘recession’ wouldn’t be in my vocabulary, just looking at our data,” United Airlines CEO Scott Kirby said on CNBC’s Squawk Box on Tuesday.
Though the airline foresees a “mild recession induced by the Fed,” Kirby said, United’s revenues are still going up. “We’re still setting records,” he noted.
In October, United Airlines reported third-quarter revenue of $12.9 billion, 66% higher year on year, and 13.2% higher than the same quarter in 2019, before the COVID-19 pandemic.
It’s not all good news for the airline.
Kirby said on Tuesday that business travel had “plateaued,” though characterized it as a “pre-recessionary kind of behavior” rather than a new trend sparked by current economic conditions.
And the airline chief is optimistic that other changes to the way people live and work will help the bottom line.
“Hybrid work makes every weekend a holiday,” Kirby said on Tuesday. “What we see is that people that always had plenty of disposable income to travel now have the freedom [to travel] from a time perspective.”
Consumer spending
Kirby is not the only CEO who isn’t seeing a catastrophic downturn in economic data.
Bank of America CEO Brian Moynihan said a good jobs report helped confirm his view that the U.S. would experience only a mild downturn next year.
Citing the 263,000 jobs added in November, Moynihan asked: “How could you have an unemployment-less recession?”
Banks are now pushing their forecasts for when a U.S. recession might hit, if one happens at all.
In September, Bank of America pushed its prediction of a mild recession from the end of 2022 to the first half of next year, citing resilient consumer spending. Last month, Goldman Sachs and Morgan Stanley both said that the U.S. might not have a recession at all.
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