Good times for U.S. economy may be over, says billionaire investor Buffett

A woman walks past a retail store in Arlington, Virginia, the United States, Jan. 18, 2023. U.S. retail sales in December fell to their lowest level in a year, weighed down by decreasing auto sales and many other products. (Xinhua/Liu Jie)

Billionaire investor Warren Buffett said the majority of his company's businesses would report "lower earnings this year than last year," suggesting the good times for the U.S. economy may be over.

OMAHA, the United States, May 7 (Xinhua) -- Billionaire investor Warren Buffett, chairman and CEO of Berkshire Hathaway, said Saturday that the majority of his company's businesses would report "lower earnings this year than last year," suggesting the good times for the U.S. economy may be over.

"It is a different climate than it was six months ago," Buffett said at the Berkshire Hathaway 2023 Annual Shareholders Meeting on Saturday, the first in-person meeting since the COVID-19 pandemic began, gathering tens of thousands of shareholders from over 40 countries.

Buffett, 92, said his managers "were surprised" by the economic conditions, with Berkshire companies forced to deal with excess inventory.

"In the general economy, the feedback we get is that perhaps the majority of our businesses will actually report lower earnings this year than last year," said Buffett, who said Berkshire owes its success to the incredible growth of the U.S. economy over the decades.

Talking about the recent U.S. bank failures, Buffett said it would have been "catastrophic" to let any Silicon Valley Bank depositors lose their money when regulators seized the troubled California lender, calling for more conservative banking practices.

Bank regulators must find a way to punish executives and board members who make risky decisions that doom a bank, calling for better communication with the American public to prevent further potential bank runs, said Buffett.

Buffett expects issues in the banking sector could continue, but he said depositors shouldn't worry about their money.

When asked if the U.S. dollar can continue its global dominance, Buffett said it's unlikely that the U.S. dollar will be dethroned as the reserve currency, even amid concerns about the U.S. debt ceiling. Still, he warned against the extent to which the United States has been printing money.

U.S. Treasury Secretary Janet Yellen said Monday that the deadline to extend the debt ceiling or face the first U.S. default could be as early as June 1.

Buffett spoke briefly on the debt limit, noting that he could not imagine the U.S. government allowing "the debt ceiling to cause the world to go into turmoil."

He also expressed broad worry about the trajectory of U.S. politics, saying that "Partisanship, it seems to be, has moved toward tribalism, and tribalism just doesn't work as well."

Berkshire operates in various industries, including insurance, energy, real estate, railroads, manufacturing, retail and services. The scale and scope of its operations mean investors view it as a microcosm of the U.S. economy.

Warren Buffett (C), chairman and CEO of Berkshire Hathaway, speaks to reporters during the company's annual shareholders meeting in Omaha, the United States on May 4, 2019. (Xinhua/Yang Chenglin)

Berkshire's annual shareholders' meeting, dubbed by Buffett and fans as "Woodstock for Capitalists," was held for the first time in 1973 in the employee cafeteria at an insurance company they owned.

The annual lunchroom gatherings stayed small for several years. As Berkshire got bigger, the meeting moved to larger arenas.