Good morning.
The most predicted recession of modern times has been delayed…again. Yesterday’s GDP report showed the economy grew at an annual rate of 1.1% in the first quarter—slow, but still positive. And while economists continue to see a downturn on the horizon, I’ve yet to encounter a single CEO who sees signs of it in his or her own numbers.
The GDP report also showed that inflation remains significantly above the Fed’s target. The PCE price index, excluding volatile food and energy prices, increased 4.9%. That suggests the Fed has more work to do to get inflation under control—which is why so many see a recession ahead. History offers little reason to believe that inflation can be brought down to the Fed’s 2% target without a recession.
And since it is Friday, some feedback. Several readers offered suggestions for a new phrase to describe the existential dread so many feel about the new wave of artificial intelligence. C.O. suggested we call it the “Technolypse.” J.D. called it “Technodread.” And G.K. harkened back to 2001: A Space Odyssey, suggesting we call it “Hal.” Meanwhile, M.C. rejected the entire exercise. “The worst thing to do would be to give it a new name or catchphrase. It infantilizes it—makes it seem less frightening… Let’s choose to be grownups and call it what it is: Terrifying.”
More news below. And speaking of A.I., be sure to read Viv Walt’s deep dive into Klarna, the Swedish company that helped invent the buy-now-pay-later industry and rode it to become Europe’s most valuable startup. More recently, rising interest rates and the specter of recession have caused the company to lose 85% of its private market value. But its founder thinks a ChatGPT plug-in may be the route to salvation.
Alan Murray
@alansmurray
alan.murray@fortune.com
