By the time Wall Street’s pessimism about the U.S. economy spilled over to Elon Musk, the world’s richest man, things could have gotten pretty bad.

The seasonally adjusted annual U.S. auto sales were 12.7 million in May, down 11 percent from April, a number that analysts say usually means the economy is in recession.

On Thursday, local time, Tesla CEO Elon Musk said in an email to all employees that he had a “super bad feeling” about the economy and made a sudden decision to lay off 10% of Tesla’s employees and suspend the global Hiring decisions.

Musk has previously issued a “compulsory arrival order” to employees, requiring Tesla employees to either work in the office for at least 40 hours a week or count as resignation. His move was immediately interpreted by the market as wanting to “disguise layoffs” by sending employees to work.

The analysis said that part of the reason for Tesla’s layoffs is the unsatisfactory income generated per capita. The number of Tesla employees has more than doubled in the past three years to about 100,000. While revenue is growing 36% annually, revenue per employee is growing at just 7%, putting downward pressure on Tesla’s nearly $800 billion valuation. Musk also said in the email that Tesla is “overstaffed in every business area.”

Musk warned of a recession as early as late last year, saying at an earlier All-in summit that the U.S. economy is likely to be in a recession that could last 12-18 months.

Wall Street sees a symphony of decline

At the same time that Musk sent the email, the symphony of Wall Street’s symphony of decline was echoing over the U.S. financial market.

JPMorgan Chase CEO Jamie Dimon warned of an “economic storm” at a financial conference on Wednesday:

The “economic storm” is right in front of us, and no one knows if it’s a small storm or a Sandy-sized super hurricane, and we better prepare for it.

Bank of America CEO Brian Moynihan, who was also present at the meeting, issued a similar warning.

We are in North Carolina (where Bank of America is headquartered) and we experience hurricanes every year. We have no choice but to always be ready…

Goldman’s No. 2, John Waldron, issued a similarly gloomy forecast this week, warning of tough times ahead due to a series of shocks to the global economy.

The current environment is quite tricky, if not the most complex and uncertain in my career. The various shocks to the entire system are unprecedented for me.

There are three reasons why the world-renowned investment banks are bearish on the U.S. economy. It may cause supply chain disruption at any time.

Entering May, expectations of three consecutive 50 basis point interest rate hikes by the Federal Reserve aggravated market worries about a recession. The CEO of JPMorgan Chase said there is a one-third chance of a soft landing by the Fed, but also a one-third chance of a mild recession; Wells Fargo CEO also said that the U.S. economy is unavoidable to a certain degree of recession, and rising interest rates mean the economy must slow down, A soft landing for the U.S. economy is hard to come by.

In addition to Wall Street, the “old leaders” of the Fed have spoken out one after another as early as April, accusing the Fed of acting too late and a recession is almost a foregone conclusion. The top three leaders even said that the probability of a soft landing is zero.

Although the year-on-year growth rate of CPI in the United States in April fell compared with the previous month, it was still higher than market expectations and the Fed’s target inflation, and was still near a 40-year high.

The U.S. CPI data for May will be released next week, which may determine the Fed’s rate hike path after July. But it is almost certain that inflationary pressures in the United States remain enormous.

Former Goldman Sachs CEO: Curb Negativity

Of course, some people think that Wall Street and Musk are too pessimistic.

Former Goldman Sachs CEO Lloyd Blankfein tweeted on Friday local time that people should “slightly contain” their negativity, and that while the risks are still high, the economy could still achieve a “soft landing”:

Curb negative emotions about the economic outlook. If I were running a large company, I would certainly have prepared for the worst. But the economy is rebounding from strong employment, with new jobs outpacing job losses and adjusting to higher interest rates. A “soft landing” is still possible (despite the current) riskier period.

In a note to clients last week, Goldman Sachs analyst Jan Hatzius said fears of an economic slowdown “will be overblown” unless new negative facts emerge.

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