①Moody's Mark Zandi, chief economist at Moody's Analytics, said that despite the strong U.S. third-quarter GDP data, it was not enough to change his view on the current economic situation;② Zandi has been warning about the economy since the beginning of the year, and recently stated that he believes the U.S. is on the verge of recession. The latest GDP report seems to have failed to rekindle his confidence in the economic outlook.
Mark Zandi, chief economist at Moody 's Analytics, said that despite the strong U.S. third-quarter GDP figures, they were not enough to change his view on the current economic situation.
The U.S. Bureau of Economic Analysis (BEA) finally released its latest economic growth data on Tuesday, which significantly exceeded economists' previous expectations. Several economic indicators, including this report, were delayed due to the U.S. federal government shutdown.
Data shows that the annualized GDP growth rate in the United States reached 4.3% in the third quarter, mainly driven by strong consumer spending and federal government spending.
However, in an interview, Zandi said he still had doubts about how the economy was functioning "below the surface."
Zandi has been warning about the economy this year, recently stating that he believes the United States is on the verge of recession. The latest GDP report appears to have failed to rekindle his confidence in the economic outlook.
“Despite the significant increase in real GDP this quarter, if we remove the occasional fluctuations in the quarterly data, the real GDP growth rate is closer to 2% at a deeper level,” Zandi said. “This is only acceptable, not ideal, and not enough to create sufficient jobs, as the unemployment rate is steadily rising.”
Zandi had previously predicted that real GDP would grow by 3.8% in the third quarter, higher than the 3.3% forecast by most economists. Therefore, he was not surprised by the result. However, he also speculated that the much stronger-than-expected GDP growth might be more due to technical factors than to real economic momentum.
“The biggest difference from my prediction is that the trade deficit has narrowed more, but this is mainly due to volatility caused by tariffs. Government spending is also stronger, but this is likely a statistical issue,” he said.
Zandi pointed out that the government shutdown also increases the risk of revisions to the third-quarter GDP data, with growth rates potentially being lowered in the coming months.
“I can’t definitively link the government shutdown to its impact on government data and GDP estimates,” Zandi said. “But it wouldn’t be surprising if those figures were ultimately revised significantly.”
(Article source: CLS)
