AT&T CEO (R) John Stankey is taking a cautious stance on the short-term outlook for an economy that continues to be crippled by high levels of inflation and rising layoffs.
“It’s hard to say,” Stankey told Yahoo Finance Live at the Goldman Sachs Communacopia + Technology Conference, when asked if the US economy is experiencing a recession.
“I would tell you now, when you see the numbers coming in on inflation, it’s hard to believe that it won’t have an impact at some point. And even if we miss a full recession, the question is, ‘Is growth strong enough to enough to really replace the high levels of inflation?’ And we see more of a stagnation environment, but I think we’re going to have to go into the fourth quarter, the first quarter of next year, to really see what the outcome of that game is,” he said.
Stankey isn’t the only one offering a more dovish outlook on the economy as the October calendar — and a further hike in growth rates from the Federal Reserve — looms.
Goldman Sachs chief economist Jan Hatzius cut his 2023 GDP forecast this week to 1.1%. Previously, Hatzius was looking for 1.5% growth.
Hatzius says he sees a “slightly worse” outlook for growth and employment next year as the Fed tightens financial conditions with comatose inflation.
The closely watched economist’s GDP cut comes on the heels of headline financial warnings from Fedex and Ford, both of which blamed mixed economic conditions.
For AT&T, recent trends in its business highlight the economic pressures facing households.
On July 21, the telecom major’s stock fell 7% after the company revealed in its second-quarter earnings that customers were paying their bills about two days later compared to trends seen a year earlier. That subsequently led to AT&T lowering its free cash flow guidance for the full year by $2 billion.
“We haven’t seen any changes in the trend,” Stankey told Yahoo Finance Live. “It hasn’t deteriorated further, and frankly, we wouldn’t expect it to.”
Brian Sozzi is an editor in general and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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