Musk sees U.S. as 'probably' in recession lasting up to 18 months

Elon Musk said  that the U.S. economy was “probably” in a recession -- a judgment at odds with economists and available data -- and cautioned companies to watch costs and cash flows.

“These things pass and then there will be boom times again,” Musk told the All-In Summit in Miami Beach, according to a live-streamed video of his remarks posted by a Twitter user. “It’ll probably be some tough-going for, I don’t know, a year, maybe 12 to 18 months.”

Recession fears have been growing recently as the Federal Reserve tightens monetary policy to help cool down inflation that’s running near its hottest pace since the early 1980s. Still, odds of downturn in the coming year currently stand at 30 per cent, according the latest Bloomberg monthly survey of economists.

While the U.S. economy shrank an annualized 1.4 per cent in the first quarter, the weakness was primarily due to a record trade deficit. Measures of demand -- consumer spending and business investment in equipment -- actually quickened at the start of 2022. The U.S. Federal Reserve Bank of Atlanta’s GDPNow estimate currently has second-quarter gross domestic product rising at a 1.8 per cent pace.