C.E.O.s Are Talking More About Recession

Recession has been an increasingly hot topic, reports the DealBook newsletter. It’s customary for large public companies to hold conference calls with analysts after they report their earnings. Of the 409 companies listed on the SP 500-stock index that have held analyst calls to discuss the most-recent quarter, the R-word came up as a topic 165 times, according to Sentieo, a market data provider.

A year ago, “recession” was uttered on 42 earnings calls by SP 500 firms for the third quarter. Discussions about a recession have been elevated throughout this year, with big year-over-year jumps in the first and second quarters as well.

Last week, Federal Reserve officials made a fourth supersize interest rate increase in an effort to tame inflation, heightening fears of an economic slump. The Fed chair, Jerome H. Powell, said he thought there was still a window for a so-called soft landing, in which inflation dissipates but the economy does not fall into a recession. “Has it narrowed? Yes,” Mr. Powell told reporters. “Is it still possible? Yes.”

Some economic indicators released last week seemed to back Mr. Powell’s view. Last quarter, the gross domestic product rose at a better-than-expected annual pace of 2.6 percent. On Friday, the government reported that employers added 261,000 jobs to their payrolls in October, which was also above expectations.

Nonetheless, chief executives on 88 third-quarter conference calls said that the Fed’s raising of interest rates to fight inflation was either a major factor slowing their business, or that they expected it to be, according to Sentieo. Last week, Steven Roth, the real estate developer and chief executive of Vornado Realty Trust, told analysts that because the Fed was “deadly serious” in fighting inflation, “the economy is clearly slowing.”

Article source: https://www.nytimes.com/2022/11/07/business/dealbook/chief-executives-recession.html