IBM's Gary Cohn Warns of Economic Concerns Despite Strong GDP Growth

Gary Cohn, former President of Goldman Sachs and current Vice Chair of IBM, warns investors about the economy despite strong GDP growth. Cohn points to a 15% drop in investment and a weakening job market, including a drop in voluntary quits. He believes businesses will eventually pass higher costs to consumers and predicts the Federal Reserve will hold rates steady. Analysts have a Moderate Buy consensus rating on the SPDR S&P 500 ETF Trust, with an average price target of $697.42, implying 9.6% upside potential.

Despite a stronger-than-expected 3% GDP growth figure, Gary Cohn, the former President of Goldman Sachs and current Vice Chair of IBM, has warned investors about deeper economic indicators that suggest a more troubling story. Speaking with CNBC, Cohn highlighted that while headline numbers appear solid, underlying trends such as a 15% drop in investment and a weakening job market are raising concerns about future growth.

Cohn, who previously served as Director of the National Economic Council under President Trump, pointed to Tuesday’s JOLTS report, which showed that the economy lost 280,000 jobs and recorded 150,000 fewer voluntary quits. The drop in quits is significant, Cohn said, because “people quit their job when they believe the next job is better and higher-paying,” which suggests that workers are becoming less confident about opportunities.

In addition, Cohn predicted that businesses will eventually pass higher costs onto shoppers, even if they’re currently absorbing some expenses. He believes that disappointing earnings results from consumer-focused companies like Starbucks (SBUX), Whirlpool (WHR), and UPS (UPS) are evidence that “the consumer is feeling the pinch.” As for the Federal Reserve, Cohn believes that policymakers are likely to hold rates steady due to the mixed signals in the economy, saying, “If I was sitting in that boardroom right now, I would… probably sit here and do nothing.”

Turning to Wall Street, analysts have a Moderate Buy consensus rating on the SPDR S&P 500 ETF Trust (SPY) based on 422 Buys, 77 Holds, and five Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average SPY price target of $697.42 per share implies 9.6% upside potential.

References:
[1] https://www.tipranks.com/news/why-ibms-gary-cohn-is-warning-investors-about-the-economy
[2] https://fortune.com/2025/07/31/gary-cohn-warnings-under-surface-economy-tariffs-inflation-consumer-spending/