Walmart, JPMorgan, GM CEOs talk about possible slowdown

As 2023 approaches and the prospect of a recession looms, corporate America is preparing for a slowdown in consumer spending.

CEOs of major companies including Walmart and General Motors joined CNBC’s “Squawk Box” on Tuesday morning to talk inflation, interest rates, geopolitics and what it all means for their outlooks in the new year.

Here’s what they said:

Rising interest rates, record inflation, geopolitical pressure and other factors could coalesce into a recession, JPMorgan Chase CEO Jamie Dimon told CNBC.

Savings and government aid during the pandemic are helping keep consumer wallets stable, but inflation and rate hikes are “eroding everything,” he said.

The CEO projected that the elevated consumer spending of 2022 will not last much longer, and underscored the risk posed by rising interest rates as the Fed works to curb inflation.

This year’s geopolitical upheaval, including the war in Ukraine and strained trade with China, are also among the “storm clouds” Dimon is watching. As the dollar strengthens, he noted that international trade for something like oil will continue to get more expensive since weaker currencies are forced to match the difference.  

“When you look out forward, those things may well derail the economy and cause this mild to hard recession that people are worried about,” Dimon said. “It could be a hurricane. We simply don’t know.”

General Motors CEO Mary Barra anticipates economic headwinds next year but is not sounding the alarms for a recession just yet.

“I’m not going to call a recession, that’s for economists to do,” Barra told CNBC. “But right now, we’re still seeing a pretty strong consumer.”

Even so, the car manufacturer is proceeding with caution to be prepared for a potential collapse in demand, similar to what other industries have seen. During the pandemic, when consumers were spending less on travel and services, some industries saw elevated demand and were caught off guard when that demand later disappeared.

Barra said GM is preparing “a fairly conservative 2023” cost-wise to avoid being blindsided, but that she is still seeing “pent-up demand” lingering from the pandemic.

Barra also expects issues problems from the pandemic, such as semiconductor shortages and strained supply chains, to persist into 2023 despite improvements each quarter.

Walmart CEO Doug McMillon doesn’t want a recession, but he thinks it might be a necessary evil to ease inflation for his customers.

“We’ve got some customers who are more budget conscious that have been under inflation pressure now for months,” McMillon said. “Should the Fed do what it needs to do, even if it is a much harder landing than we’d like? I think inflation needs to be dealt with.”

Though Walmart is still…