Last week, the U.S. government released unusually strong economic data for the third quarter, surprising and raising questions among many economists.
Among them, Moody's Chief Economist Mark Zandi bluntly pointed out that the actual GDP growth data for the United States may not be as optimistic as the figures released by the Trump administration, and that this GDP growth data is likely to face a significant downward revision in the coming months.
Does the United States still face the risk of recession?
Last week, the U.S. Bureau of Economic Analysis released its third-quarter GDP data. The release was delayed due to the prolonged government shutdown under the Trump administration, and the final figures were much more optimistic than economists had expected.
According to a report from the Trump administration, the U.S. economy grew by 4.3% year-on-year in the third quarter, compared to economists' expectations of 3.3% and a 3.8% growth rate in the previous quarter. The data shows that the U.S. GDP growth in the third quarter was exceptionally strong, driven by robust consumer spending and federal spending.
However, Mark Zandi stated that he remains concerned about the deep-seated problems within the U.S. economy.
Mark Zandi has been warning about the U.S. economy for the past year. Even after the Trump administration released such strong GDP figures, he still stated that he believes the U.S. is on the verge of a recession.
"Despite the significant GDP growth this quarter, the potential growth rate of U.S. real GDP after adjusting for quarterly fluctuations is likely only close to 2% ," he said. "That's a decent figure, but not great, and it's not enough to create enough jobs as the U.S. unemployment rate is steadily rising."
Strong GDP figures are likely due to technological factors.
Mark Zandi had previously projected U.S. third-quarter GDP growth of 3.8%, already higher than the 3.3% predicted by most economists. Therefore, Zandi was not particularly surprised by the 4.3% figure released by the Trump administration.
However, he also emphasized that the exceptionally high growth rate of 4.3% was likely due to accidental technical factors rather than the actual growth momentum of the US economy.
“The biggest difference from my forecast is the significant reduction in the trade deficit, but this is mainly due to fluctuations caused by tariff policies. Government spending has also increased, but this may be due to issues with statistical methods,” he said.
Zandi believes that the Trump administration shutdown has also increased the risk of revisions to the third-quarter report, and US economic growth data is likely to be revised downwards in the coming months.
“I can’t definitively link the government shutdown, its impact on government data, and the GDP estimates,” Zadi said, “ but ultimately, it wouldn’t be surprising if those figures were revised significantly downward. ”
(Article source: CLS)
