July 5, 2022

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Elon Musk warned that a recession in the United States was “inevitable.”

File photo of Elon Musk, founder of SpaceX and CEO of Tesla (REUTERS / Aly Song)

Elons Musk, the world’s richest man, issued a warning on Tuesday The probability of the US economy entering recession is increasing.

He was speaking at the Qatar Economic Forum in Doha. Tesla’s CEO said the recession in the United States could appear in the future.

“I think at some point the recession will be inevitable. This is not a certainty, but it seems unlikely, “said Musk. Bloomberg NewsJohn Mickletwhite.

His outlook raises fears of a sharp fall in the world’s largest economy as the US Federal Reserve raises interest rates in the face of decades of rapid inflation. President Joe Biden stressed Monday that the recession in the United States is not “inevitable.” After a conversation with former Treasury Secretary Larry Summers, he sees a significant opportunity to combat the stagnation.

President Biden’s economic adviser announced on Tuesday that the U.S. government was concerned about a possible recession, but said the foundations of the economy were strong enough to meet that risk. “Obviously this is worrying, but our economy is strong.”Cecilia Roose revealed to the chain CNBC.

“If we look at the key components of GDP over the last quarter (when activity contracted), they were solid in terms of consumer spending,” he said. “Labor market is strong” And growth continued, the adviser said, adding that weakness in the first quarter was due to lower exports.

File image: Cecilia Roose (REUTERS / Jonathan Ernst), White House Economic Adviser
File image: Cecilia Roose (REUTERS / Jonathan Ernst), White House Economic Adviser

U.S. gross domestic product (GDP) contracted by 1.5% year-on-year in the first quarter, the most widely used in the country, comparing GDP with the previous quarter. Measurement, estimates estimated growth at 12 months.

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Compared to the first quarter of 2021, GDP recorded a 3.5% expansion. During the quarter, there was a contraction of 0.4% between the first quarter of 2022 and the last quarter of 2021.

“I do not think a recession is inevitable.” Treasury Secretary Janet Yellen told the Network over the weekend ABC. Yellen agreed He expects the “economy to slow down.”

The economy is considered to be in recession as GDP shrinks for two consecutive quarters.

Subsequent increases in Federal Reserve interest rates make planning in the United States a hypothetical recession at the end of the economy.

“We expect a small recession in the coming months, with stable inflation, forcing a more transparent adjustment in monetary policy.”Gregory Taco, chief economist at EY-Parthenon, said in a statement on Tuesday.

(With information from AFP and Bloomberg)

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