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FTN Financial Economist Lindsey Piegza on the outlook for job growth, the economy and the housing market.
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Is on the jobs front -- can call it that new claims for unemployment benefits fell more than expected last week.
Not Bible have a lot of them up for the four week moving average -- creeping back up again where over 380000.
I think for three weeks in around them -- labor market really getting any better joining us to break it all down that Lindsay EPA that economist with FT and financial let's talk about these numbers first.
How do you believe them.
There are behind us who knows how they calculate -- It seems like as of late there's a little something for everyone in these economic report even those that suggest the momentum is slowing down.
You can still find the silver lining -- as you mentioned this morning claims fell.
But that's on the heels of an upward revision for the prior week and of course this is the second consecutive weekly decline -- out of four week moving average.
We're right back where we were the February numbers so really we've seen a reversal of that trend taking away that three month improvement.
But looking at trades you say that this is we've seen this before I a nice push at the beginning of the year and and it all kinda Peters out as we look forward to where do we where are we doing what we're we're very much in the same pattern that we've seen over the past twelve and 24 months.
At the end of the fourth quarter the consumer comes out -- spending it's the holiday season -- we turn the corner into the new year and all of a sudden businesses are more optimistic they start to take on new employees.
But as we move further into the second quarter in the second half.
Growth in employment begins to decline.
Says deja Vu all over again it really yes -- Europe you're saying is not the biggest threat to our economy no I really don't see Europe as the biggest threat now remembered the last time the global economy fell into recession.
A recession that was not led by the US -- was back in 1998.
In the US economy actually expand that we're posting 7% GDP by the end of 1998 compared to 1% in Europe.
Now of course the reason we are able to see this very robust growth was very low -- -- unemployment.
And very low inflation of course that inflation coming from decline in the demand for raw materials and commodities so it's very likely that we see a similar scenario this time around.
And when you compare you know GDP is between the Euro zone and and the US US is far ahead.
But having real trouble getting traction what's it going.
You know truly recover before we can actually -- for.
Housing still very weak but even as housing against recover it's gonna contribute about half as what it did in 2000 senate -- the consumers no longer relying on the appreciating value of their home.
The supplement spending so it's really not going to be that ATM machine at a once was.
What we really need to see is a reversal of some this.
Regulation and uncertainty regarding taxes to give businesses an incentive to invest and grow that's really what we need to see that underlying creation of jobs and income.
So that you're saying is the biggest threat to our economies are now OK so then it's sort of plays out that we see this low period over the summer and until the presidential election do you counter and that will be the pivotal point then that gets everybody comfortable it could be but right now we're really on the fiscal class if you think about the bush tax cuts the payroll taxes -- the unemployment benefit extensions.
And of course it mandatory spending cuts retail that all into account.
That total 660 billion dollars or three and half percent of GDP.
Right now -- only growing about 2%.
So government policy really does have this this up possibility of do you -- the entire economy.
All this uncertainty -- health care to hanging out the -- -- all this they don't Bloomberg actually get a great study asking businesses.
That said they were poised to -- why they haven't -- -- -- number one reason was the uncertainty surrounding health care costs.
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