“How could you have a recession without unemployment?  Bank of America CEO Brian Moynihan Says Latest Jobs Report Confirms His Prediction of 'Mild' Slowdown

“How could you have a recession without unemployment? Bank of America CEO Brian Moynihan Says Latest Jobs Report Confirms His Prediction of ‘Mild’ Slowdown

Bank of America CEO Brian Moynihan stands by his earlier predictions that a US recession, if it occurs, will not be as bad as people fear.

“How could you have a recession without unemployment?” Moynihan asked on CBS News Confront the Nation program on Sunday, citing the 263,000 new jobs reported in the US jobs report on Friday.

The Bank of America CEO said Sunday he expects the U.S. economy to contract “just 1%” for the first three quarters of 2023 and then return to positive growth. “This is a milder recession,” Moynihan said.

Moynihan has been more optimistic about the US economy than some of his peers. Last week, the CEO of Bank of America predicted a slight slowdown in CNN, joking “hurricane season is now closed”. (Moynihan was referring to a June comment by JPMorgan CEO Jamie Dimon that the US economy was facing a “hurricane”)

In June, Bank of America’s new head of U.S. economics predicted that the U.S. could experience a mild recession by the end of 2022. But strong consumer spending in September led the research team at Bank of America to postpone its recession forecast to 2023. pull it out,” Moynihan joked last month at the Fortune CEO Initiative conference.

Moynihan’s more optimistic view of America’s economic future stands in stark contrast to other dire forecasts.

In October, Nouriel Roubini, the New York University professor often nicknamed “Dr. Doom” for his predictions of the 2007 housing crash, said he expects the United States to face a “long and ugly” recession.

Last week, Allianz chief economic adviser Mohamed El-Erian called on banks to predict a “short and shallow” recession in an op-ed for the FinancialTimes. El-Erian says he fears they risk “a repeat of the analytical and behavioral pitfalls that figured in last year’s ill-fated inflation call.”

A June survey of the FinancialTimes reported that two-thirds of US economists believe a recession will hit next year. CEOs are also worried, with 98% of business leaders bracing for a recession in the next 12 to 18 months, according to an October Conference Board survey.

Still, on Sunday, Moynihan defended his more optimistic view by pointing to the strong performance of the United States amid the Federal Reserve’s interest rate hikes.

“When the Fed started raising rates, it was believed there would be an immediate collapse of the economy,” Moynihan said. “This does not happen.”

Other banks are also reconsidering the possibility of a US recession, thanks to better than expected economic data. Goldman Sachs and Morgan Stanely both predicted in November that the United States could narrowly escape a recession.

The Bank of America CEO pointed to some negative indicators, such as a weakening housing market and slowing consumer spending. But Moynihan says the swings prove the US economy is becoming more sustainable.

Falling job postings and turnover, in particular, aren’t good for individual job seekers, Moynihan says, but they’re “actually good signs for the economy in that it’s starting to get into a better situation that she can grow at a more normalized rate.”

Bank of America economists predict unemployment will hit 5.5% by next year, according to a research note released last week. People losing their jobs is “a horrible thing to consider,” Moynihan said Sunday, but the United States has seen this unemployment before. Prior to the COVID-19 pandemic, the United States had recently recorded an unemployment rate of 5.5% in May 2015.

“We didn’t feel awful then,” Moynihan said.

This story was originally featured on Fortune.com

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