GDP grew at an annual rate of 2.9% a in the third quarter revised analysis by the Bureau of Economic Analysis showed on Wednesday.
Democrats &supporters of President Joe Biden said the data showed the economy was not headed for a recession. But a prominent economist explained that when you dig into the data, the picture isn’t as bright as they claim.
what are the details
Tiffany Wilding, an economist who works for investment management giant PIMCO, told CNBC’s “Squawk Box” that the report is fallacious because certain measurements skew the data.
“There is a bit of noise that you need to take into account as stock levels and trade numbers can obviously be very volatile. If you look at the details of the third quarter GDP numbers, if you exclude these more volatile categories, you find that the growth was quite subpar,” she said.
“For the full year – excluding those categories, let’s call it ‘final domestic demand’ – growth is below 1%,” she explained, noting that 2021 saw “robust” growth of 5%.
“Core growth has slowed quite a bit, and that’s before you really start to feel the impact [Federal Reserve] Monetary tightening and Fed tightening because that works with a lag,” Wilding said.
We expect the US economy to slide into recession next year, says PIMCO’s Tiffany Wildingwww.youtube.com
Indeed, as Obama administration economist Jason Furman explained on Twitterthe BEA’s headline figure of 2.9% growth is a “less accurate” figure because it doesn’t show a holistic view of the economy.
In fact, economic growth has been revised downwards, he noted.
Economists have repeatedly warned of a recession, in part because of the US Federal Reserve’s measures to combat inflation. Conventional economic wisdom dictates that aggressively raising interest rates will result in a “hard landing,” economists speak of a recession.
Fed Chair Jerome Powell did given on Wednesday The Fed would continue with smaller rate hikes next month, although he believes its measures to combat inflation have proved largely ineffective so far.
https://www.theblaze.com/news/tiffany-wilding-gdp-report-recession Prominent economist provides reality check on GDP report: ‘We think the economy is slipping into recession’