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GDP: Not What it Seems?

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  • Description

    Phillip Swagel, University of Maryland economist, weighs in on third-quarter GDP and the economic recovery.

  • Duration 2:54
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Only eleven days ago before the election third quarter GDP grew at a higher than expected 2% rate.

Consumer sentiment rose to its highest level in five years but -- -- economies the University of Maryland and former assistant Treasury Secretary says.

That does not really as good as it seems and he joins me.

-- now be one of the things that I notice in this report.

What backed government spending jumped quite a bit in the quarter was up.

9% -- better than I think almost 10% so that's one big hits -- reducing the number what did you make of it.

Yeah absolutely -- the Pentagon.

It sees that this Bill Clinton was defensive but there is trying to get that spending -- The -- was temporary.

And consumer spending was just -- we know the job market is.

Improving -- very slowly it's hard demanding consumer spending will remain so strong and left the job market get better.

Knowing on the back anatomy you look inside the -- and business spending was -- really important especially if you look at business spending.

-- -- -- cost which you know that's buying buildings structures buying equipment is buying computers buying things.

You know that you're gonna invested for the long term basically because your business is growing.

That number -- I mean what does that tell you.

Yeah -- it says striking difference between consumers and businesses but businesses are not hiring they're not.

Finding new equipment they need to make their existing workers more productive and they're just nervous -- they see what's going on here in Washington -- see what's going on in this.

The fiscal environmental regulations taxes and their nervous that -- we need to need to find away he had businesses less nervous get them back to spending and.

Higher and so if you -- trying to spin this in a positive direction you would say that GDP.

Expanded for the previous quarter no matter how modest that wise it was -- -- changing of -- up to kill.

That's a step in the right direction writer how would you respond back.

No I would I'd say look we're we're growing we're adding jobs the unemployment rate has come down he's just not satisfactory it's not we're not gonna growing.

At the pace that we need to create the jobs to reduce the unemployment -- so it's growing is just not enough.

Yeah I think he's expanding -- -- percent how how much could that possibly from a quantitative point of view.

How much could that possibly with us on employment -- lower the rate with the number of people finding jobs.

Yes that's -- consistent with -- hundred thousands and jobs -- -- And a very small very sluggish declining in acquiring tries not to go up and left lots of people come back into the labor force.

But where he stuck around seven point 88%.

For the foreseeable he.

Right we continue to grow and affect how -- would it.

Take got to get back to like -- 45% unemployment rate years and years and years right years let me tell you.

456.

Years.

Which is -- the Fed is expecting them in the Fed the latest fed forecast that's within vision.

Yeah -- yeah.

My thanks so much for what -- we appreciate it.

Stay out of traffic there ever -- I'd probably chairman.

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