June 3, 2023

Tesla Inc.

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Chief Executive Elon Musk said he expected the US to be headed for a mild recession and predicted that the rapid pace of inflation would begin to ease.

Inflation will decline rapidly in the coming months, Mr. Musk said Thursday at the automaker’s annual shareholder meeting, where shareholders approved a 3-for-1 stock split. It will take effect with trading starting Aug. 25 for the shareholders of record on Aug. 17, the company announced Friday.

At Thursday’s rally, said Mr. Musk, “My guess is that we’re past peak inflation and that…we’re going to have a recession.” He added: “I think it will be a relatively mild recession. I’m just guessing here. That’s complete speculation, but I’d guess it’s a mild recession for 18 months or so.”


Where do you think the economy is headed? Do you agree with Elon Musk? Join the discussion below.

Mr. Musk said that Tesla is starting to see commodity prices begin to decline, indicating that the pace of inflation is starting to ease.

“We have a good picture of where the prices of things are going over time because when you’re building millions of cars, you have to buy goods many months before you need them,” he said.

Mr Musk’s comments come amid slowing economic growth in the US and a debate over whether the nation has entered a recession.

On Friday, the Labor Department reported that the US economy added 528,000 jobs and that the unemployment rate fell to 3.5%, a half-century low also seen just before the pandemic in early 2020. The data further complicates economic forecasts. of the country.

The comments by Mr Musk, the world’s richest man, are similar to what he said on Tesla’s earnings call last month, when he said inflation was likely to ease towards the end of the year.

He warned that economic conditions could change.

“Making macro forecasts is a recipe for disaster,” Mr Musk said.

The Consumer Sentiment Index and the Consumer Confidence Index attempt to measure the same thing: consumer sentiment. The WSJ explains why the Federal Reserve is keeping a close eye on consumer confidence in 2022. Illustration: Adele Morgan

Write to Joseph De Avila at joseph.deavila@wsj.com

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