Walmart's chief economist optimistic for U.S. economy this year
By Siddharth Cavale
NEW YORK, Jan 27 (Reuters) - Walmart Inc's first chief economist, John List, said on Friday he is optimistic about the U.S. economy this year, citing the strength of the job market compared to previous economic downturns.
"When you look at the current labor market, it looks very different from what we have in most recessions," List told a business event.
He noted current underemployment and wage growth trends that showed positive contrasts to periods such as the COVID-19-fuelled recession and the financial recession of 2008/09.
Underemployment - defined as the phenomenon when people want full time work but have to settle for part time work - is the lowest it has been in the past 20 years, while current wage growth rates are higher than at any point during the same period, List said, labeling the underemployment trends "very positive."
Asked about the likelihood of a recession, List, who joined Walmart in April last year, said that besides any big shocks to the economy, it was "hard to imagine the labor market going into a decrease" or two quarters of negative economic growth.
List's comments follow Commerce Department data on Friday which showed inflation was easing, spurring hopes that the U.S. Federal Reserve would slowdown its pace of its recession-inducing interest rate hikes.
However, U.S. consumer spending, which accounts for more than two-thirds of U.S. economic activity, fell in December, the second straight month of declines, putting the economy on a lower growth path heading into 2023.
"When you look forward at data that might be coming, I am in general more optimistic," than forecasters would suggest, said List, who is also a distinguished professor at the University of Chicago.
With more than 5,000 stores across the United States, Bentonville, Arkansas-based Walmart tends to do well during times of economic distress.
In its most recent results from November, the company reported a strong rise in comparable sales at its U.S. stores and lifted its annual forecasts, expecting more budget strained customers to shop at its discount stores. Walmart is the country's biggest grocer, generating more than 50% of its sales selling day-to-day essentials. (Reporting by Siddharth Cavale in New York; Editing by Josie Kao)