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.
The airline still foresees a “mild recession induced by the Fed,” yet Kirby said the airline’s revenues are still going up. “We’re still setting records,” he said.
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 only experience 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 end-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.
