‘Recession is inevitable’: Elon Musk now thinks there’s a greater than 50-50 chance that the economy will decline. Here are 3 simple ways to protect your money

“As to whether there is a recession in the near term, that is more likely than not. It is not a certainty, but it appears more likely than not.”

This isn’t Musk’s first economic warning.

In an email to Tesla executives earlier this month, Musk said that he has a “super bad feeling” about the state of the economy and wants to cut 10% of the company’s workforce.

Musk isn’t the only one with this view. A new survey by the Conference Board shows that more than 60% of CEOs globally expect a recession in their region of operations by the end of 2023.

It doesn’t help the case that we are in a bear market already. If the economy falls into a recession, many stocks could see further downside.

The good news? Some sectors are more recession-resistant than others. Here’s a look at three of them.

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Consumer Staples

Consumer staples are essential products such as food and drinks, household goods, and hygiene products.

We need these things regardless of how the economy is doing.

If a recession hits the U.S. economy, many companies will likely see their business deteriorate. However, we’ll probably still see Quaker Oats and Tropicana orange juice — made by PepsiCo (PEP) — on families’ breakfast tables. Meanwhile, Tide and Bounty — well-known brands from Procter & Gamble (PG) — will likely remain on lists coast to coast.

You can gain access to the group through ETFs like the Consumer Staples Select Sector SPDR Fund (XLP) and the Vanguard Consumer Staples ETF (VDC).

More: Simple investment strategy

Utilities

The utilities sector consists of companies that provide electricity, water, natural gas and other essential services to homes and businesses.

The sector isn’t a fascinating one, but it is recession-resistant: No matter what happens to the economy, people will still need to heat their homes in the winter and turn the lights on at night.

Meanwhile, high barriers to entry protect the profits of existing utility companies. Building the infrastructure needed to deliver gas, water, or electricity is quite expensive, and the industry is highly regulated by the government.

Thanks to the recurring nature of business, the sector is also known for paying reliable dividends.