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Slightly better than expected but on next guest says the real rate.
Should remain the same disappointing one point 3% it was last -- joining us today FTM financial economist Lindsay PX it would mall.
Well the real reasons behind the growth and her outlook on this.
So cold recovery Lindsay thank you so much for being here okay 2% think he estimates just -- or maybe there's some myself.
Leeway in had -- it comes down the government spending does it.
It does but let let's -- -- the headline 2% growth a little better than expected but what that says on the headline.
Is that the economy is growing at a good pace certainly not great.
The consumer was -- spending we did see consumption jumped 2% so who -- about a half a percent better than last -- shoppers snatched up everything from.
Cars -- phones took.
Big ticket items like homes that -- the improvement in the housing market did lead to afford the fourteen and half percent increase more than offset the weakness on the corporate side his right now business says.
So yeah very hesitant to invest in equipment software structures or as we know new employee and think that -- -- -- every day as well that is that's a huge red flag isn't.
Efficient business investment has slowed always short this is that a trend that we've seen over the past several quarters -- we look at the orders report.
That's going to very negative territory on a year over year basis so.
Really going back to what -- said it's not about businesses it's not about consumers.
That number was really about government spending.
And we take out that -- usual bump in government spending and GDP was just one point 3% saying is that the same sort of -- for quite we have this divergence and between.
Business spending which is basically have zero rights but consumers are picking up this but -- in the divergence can really reflect what we're seeing in the fiscal -- businesses are saying right now they're so much uncertainty -- so much risk at the end of the year.
That under the weight and await to see what happens in Washington before I put that money to work before I think that -- that new employee.
Meanwhile consumers are saying I can switch my spending patterns at a moment's notice so I'm gonna go out there I'm gonna get that latest gadget that latest iPhone.
I'm gonna continue to spend until I know what Washington's going to do.
And then I'll adjust my spending in reaction -- I think it's an interesting to see the consumer -- the consumer hasn't really seen a pay raise right so how -- the consumer paying for all this and we will eventually.
But still that's backed down -- -- -- well that's -- so -- and it really the economy hasn't changed over the past six arguably twenty or twelve -- 24 months.
But consumer confidence is at a five year high.
So 11 -- you're saying what is the consumer looking at we have very little income growth we have very minimal job creation gas prices are still very high.
But we have made real progress and other areas.
The housing market is beginning to I've gained momentum so we're -- -- stabilization in home prices home sales of increased processing gains in the equity markets so.
Consumers are feeling more confident they're feeling more financially stable and that's really spurring this increasing spending but that there's really there's only so much optimism -- support.
That's true let's get back to the business side -- let's look at had little bits of next year's so say we avoid the fiscal cliff the election is over.
Maybe we get a better sense of where the tax system is gonna being could that.
Create a huge jump in business spending.
Oh sure I think there's there's a very large pent up -- demand for investment at this point and once we get that certainty that the market is looking for.
Once we get a more pro business environment in place -- I think you're gonna see a lot of those -- be put to work with an immediate increase investment.
I guess -- structures equipment yeah and employment and that's really what we need to see to keep this economy going.
It's scary stuff miss her -- not helping our economy along.
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