Also: Zuck's net worth, Dorsey's a hero, Clubhouse cuts.
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
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$10 billion richer
Meta's strong Q1 sales drove company shares up 14%, an increase that added $10 billion to Mark Zuckerberg's net worth. Zuckerberg now sits 12th on Bloomberg’s Billionaires Index with a fortune of $87.3 billion. Bloomberg
Crypto hero
Block CEO and Twitter co-founder Jack Dorsey is funding the legal defense of Bitcoin developers being sued by Craig Wright, who falsely claims to be Satoshi Nakamoto and argues the developers are obliged to help him recover lost Bitcoin. Dorsey’s defense fund—set up to protect Bitcoin from a wide variety of legal perils—has made him a hero for an industry under siege. Fortune
Kicked out the Club
Social media app Clubhouse is cutting over half of its staff after its pandemic-era boom went bust. Laid-off employees will receive four months of severance and get to keep their company-issued laptops. Bloomberg
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