AT&T CEO (T) John Stankey is taking a cautious stance on the short-term outlook for an financial system persevering with to wade via excessive ranges of inflation and a tick-up in layoffs.
“It is onerous to say,” Stankey instructed Yahoo Finance Stay on the Goldman Sachs Communacopia + Know-how Convention, when requested if the U.S. financial system feels recessionary.
“I’d let you know proper now, if you see the numbers coming in on inflation, it is onerous to imagine it is not going to have an effect sooner or later. And even when we miss a full-on recession, the query is, ‘Is the expansion sturdy sufficient to essentially supplant the excessive ranges of inflation?’ And we see extra of a stagflation surroundings. However I believe we will must wade into the fourth quarter, first quarter of subsequent yr, to essentially see what the end result of that recreation is,” he mentioned.
Stankey is not alone in providing up a extra sobering tackle the financial system because the calendar eyes October —and extra growth-stunting charge hikes from the Federal Reserve.
Goldman Sachs chief economist Jan Hatzius slashed his 2023 GDP forecast this week to 1.1%. Beforehand, Hatzius was searching for 1.5% progress.
Hatzius says he sees a “considerably worse” outlook for progress and employment subsequent yr because the Fed tightens monetary situations to comat inflation.
The carefully watched economist’s GDP minimize comes scorching on the heels of headline grabbing monetary warnings from Fedex and Ford, each of which blamed blended financial situations.
As for AT&T, latest tendencies in its enterprise underscore the financial pressures weighing on households.
On July 21, the telecom large’s inventory fell 7% after the corporate revealed in its second-quarter earnings that clients had been paying their payments about two days later in comparison with tendencies seen within the earlier yr. That in flip triggered AT&T to cut back its full-year free money move steerage by $2 billion.
“We have not seen any adjustments on the development,” Stankey instructed Yahoo Finance Stay. “It hasn’t deteriorated any additional, and albeit, we would not anticipate it to.”
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Observe Sozzi on Twitter @BrianSozzi and on LinkedIn.
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