(CNSNews.com) - Former General Electric Chairman and CEO Jack Welch says "things are soft" in the U.S. economy, and he expects companies' earnings to be down in the first half of the year.
"And we're in a slowdown. There's no question," Welch told Fox News's Neil Cavuto on Monday.
Both the stock market and oil prices plunged again on Monday, continuing what has been a discouraging year so far.
The Dow fell 177.92 points, or 1.1 percent, to 16,027.05 on Monday. The Standard & Poor's 500 lost 26.61 points, or 1.4 percent, closing at 1,853.44. The Nasdaq composite dropped 79.39 points, or 1.8 percent, to 4,283.75. The index is within 110 points of being in what Wall Street considers a bear market, or a 20 percent drop from its high.
For the year, the Dow is now down 8 percent, while the S&P 500 is down 9.3 percent. The Nasdaq has lost 14.5 percent this year.
Benchmark U.S. crude oil fell $1.20, or 3.9 percent, to close at $29.69 a barrel on Monday in New York. Brent crude, a benchmark for international oils, dropped $1.18, or 3.5 percent, to close at $32.88 a barrel in London.
Several factors have kept investors in a selling mood, including falling crude oil prices, the impact of a stronger dollar on U.S. company earnings, and heightened concern that economic growth is slowing in China and elsewhere, the Associated Press reported.
"Fears of a global economic downturn are now heightening concerns that the U.S. economy could slide into a recession later this year," AP said.
Welch called it "natural" that in the current circumstances, corporate earnings and price-earnings ratios "are going to have to come down."
"I will say clearly that we're in for a slowdown here. We have been in one, Neil. We had 0.7 percent (growth) in the fourth quarter and it's tough to see us doing a lot better in the first quarter of...this year."
"So what do you think is happening here?" Cavuto asked Welch.
"Well, Neil, you have got regulation on regulation on regulation. You're strangling this economy. And we're starting to see it. We haven't had a real recovery. It's been peanuts us all along.
"And we're now seeing the effects of more and more regulations. We get one almost every day, and it's suffocating the economy. That's just the way it is. And until we get a change in Washington, this is going to happen."
This past Friday, President Obama painted a rosier picture of the U.S. economy, which he described as the "strongest, most durable" in the world.
He hailed job creation, the low unemployment rate, and falling gasoline prices.
Obama also recognized that the global economy is soft, and at home, "there's still anxiety and concern about the general direction of the economy" because people are "not sure about the future," he said.
"And part of it is there's still a pretty big carry-over from the devastation that took place in 2007, 2008. If your home value drops in half or you lose a job that you thought you were secure in or your pension suddenly looks vulnerable, you are going to remember that," Obama said.
"And so a lot of people still feel that, and they're right to recognize that there's some longer-term economic trends that we still have to tackle, that the economy is more dynamic and it churns faster and the pressure on companies to maximize short-term returns oftentimes at the expense of long-term investment, the lack of loyalty sometimes to workers who've built those companies and are threatened to lay off -- be laid off, the fact that wages and incomes up until the last six months haven't gone up as fast as corporate profits have or benefits at the very top.
"All those things people feel and they experience, and so even though they know things are better, they're worried, where are we going? And -- and I think -- so I think that the argument I'm making here and will continue to make during the course of this year is we should be proud of the progress we've made. We have recovered from the worst economic crisis since the 1930s, the worst in my lifetime and the lifetime of most of the people in this room, and we've done it faster, stronger, better, more durably than just about any other advanced economy.
"Had we adopted some of the policies that were advocated by Republicans over the last four, five, six years, we know that we probably would have done worse..."
(The Associated Press contributed some of the information used in this report.)