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Tags: jack welch | slowdown | economy | neil cavuto fox

Former GE CEO Jack Welch: 'We're in a Slowdown, There's No Question'

Former GE CEO Jack Welch: 'We're in a Slowdown, There's No Question'

By    |   Tuesday, 09 February 2016 01:18 PM EST

Former General Electric Chairman and CEO Jack Welch has no doubts that the U.S. economy seems to be mired in financial quicksand.

"We're in a slowdown. There's no question," Welch told Fox News' Neil Cavuto. "Things are soft. Let's face it," he said.

"We're involved with a variety of big businesses, none are growing more than one to two percent, and our private equity portfolio outside of the healthcare space, it's a grind out there," he said. "And what is happening is the earnings probably are going to be down in the first half of the year," he said.

Several factors have kept investors in a selling mood, including falling crude oil prices, the impact of a stronger dollar on U.S. company earnings, and heightened concern that economic growth is slowing in China and elsewhere, the Associated Press reported.

"Fears of a global economic downturn are now heightening concerns that the U.S. economy could slide into a recession later this year," the AP explained.

Welch called it "natural" that in the current circumstances, corporate earnings and price-earnings ratios are going to have to come down.

"We had 0.7 percent (growth) in the fourth quarter and it's tough to see us doing a lot better in the first quarter of...this year," he said.

As for the cause of the slowdown, he says there's too many reins on an economy never fully recovered from the last recession, commonly defined as two consecutive quarters of negative economic growth.

"You have got regulation on regulation on regulation. You're strangling this economy. And we're starting to see it. We haven't had a real recovery. It's been peanuts all along," he explained.

"And we're now seeing the effects of more and more regulations. We get one almost every day, and it's suffocating the economy. That's just the way it is. And until we get a change in Washington, this is going to happen."

To be sure, Wall Street's nerves have been on edge amid the rocky start to the year.

Growth in the U.S. decelerated to a 0.7 percent annualized rate in the fourth quarter as companies contended with a slower global economy. The median probability for a U.S. recession in the next 12 months jumped to 19 percent in last month’s Bloomberg survey of economists, the highest since February 2013.

“While it’s always possible that a market correction becomes something more significant, we, at Blackstone, do not see a recession in the U.S.," said Stephen Schwarzman, chairman and CEO, Blackstone Group LP. "We do believe that global GDP growth is slowing, and we’ve seen a slowdown within certain sectors and regions in our global portfolio as a result."

Meanwhile, Newsmax Finance Insider Ed Yardeni doesn’t expect a recession and is optimistic long-term, but he expects 2016 to be “choppy and difficult.”

"I admit the risks of recession are increasing, but I’m not looking for multiples to dive into the single digits, which they do in recessions," he told Barron's.

"I remain fundamentally optimistic. Last year was choppy and difficult; this year will be choppy and difficult. But the U.S. will come out of this in particularly good stead," he said.

He said although the U.S. stock market has been unstable this year, America, as they say, is still the best house in a lousy neighborhood.

"We have a more resilient and more diversified economy than others. Clearly, the manufacturing data lately look like recession, and a lot of that is related to energy—30% of the S&P 500’s capital spending is attributable to energy companies, which are slashing spending," he explained. "But, excluding energy, profits are still growing. The consumer is still growing, but at a slower pace. A lot of jobs are being created in the services economy," he said.

© 2023 Newsmax Finance. All rights reserved.

Former General Electric Chairman and CEO Jack Welch says "things are soft" in the U.S. economy, and he expects companies' earnings to be down in the first half of the year.
jack welch, slowdown, economy, neil cavuto fox
Tuesday, 09 February 2016 01:18 PM
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