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PNC Financial Services Group chief economist Stuart Hoffman weighs in on consumer spending.
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Thank you can't believe -- always have all this kind nonsense in Washington that we keep talking about we do have real numbers on the real economy it's also talk about.
Today consumer spending we learned is down for the month of October in large part really because of hurricane sandy.
Not to worry says Stuart Hoffman the chief economist for PNC financial he joins us from Pittsburgh I don't think this is a very big deal.
Now I mean it's a deal when consumer spending falls we should -- -- in context.
And July August and September consumer spending actually had a pretty good rebound.
As you said some of the hurricane -- effect on the East Coast.
I did affect this number car sales -- -- announced.
Couple weeks ago and at least to believe the car dealers they said their sales were held down.
We'll find out on Monday whether that sales came back out when they announced November numbers.
But I -- give your -- this out we -- we saw even in our company rats and decline in sales.
Our merchant services in late.
October into early November but we've actually seen more were returned to normal and I was encouraged by that I -- is now black Thursday.
Through Cyber Monday holiday sales looked pretty good OK so the consumer was down about.
You -- to seeing improvement as we went through November.
So that's a story -- -- tells us that we're getting there and everybody says all right well what if we don't get there in terms of this.
Washington -- stuff that Monica was just talking about and we had over the cliff for whatever.
And we don't have a deal at the end of the year does that just stop us and our tracks in terms of economic recovery what's your outlook for next year in the odds are putting on recession.
Yeah I mean I put maybe a 20% odds -- recession I don't I don't agree frankly with what monitors said.
I don't think the president if you want -- higher revenue you don't wanna -- over the collapse because if you go over the cliff in the economy falls in recession.
You may have higher tax rates which one -- revenues.
Because people always say those taxes on income they -- And if I go back into recession lets people work and less income aren't more people out of work more unemployment compensation.
I don't think that's an anybody's interest that was not the national interest.
Started in Santa Monica for what it's worth by the make a prediction I would say it's in both the interest of speaker Boehner and President Obama to come up with a fix here and that that you know difference because at the end of -- added to both going to be remembered not necessarily for.
-- January February march of next year but especially for the president much further down the line is that -- your second term ago.
And you know he's -- his interest must be insane and act get it's always tough to get someone's head ideology vs long term goals but his interest must be in saying.
He had a successful second term whatever that means.
It's.
Yeah and that and that and if you have is is just a second term -- -- doesn't help to start out with your first year of your second term with the economy back down in recession.
So I think we will get a deal we will get the big deal.
Maybe some of that or drag on we can't get their compromise on the really big issues like -- mentioned.
Retirement entitlements but I think we will not fall over the cliff we have PNC assume instead of a 600 billion dollar fiscal restraint.
Which would be if everything you know that's fallen over the cliff.
It'll be a 150 dollar 175.
So that will take a bite out of consumer right -- -- maybe in the first quarter.
But we think we'll have a -- -- -- holiday sales some payback.
Early next year and if we get you know build even a rickety bridge over the cliff and that we can walker graphs what we think we'll stay out of recession next.
Thank you Stuart and I think you bring up an important point is that -- even if we do solve this so to speak you're still gets you higher taxes -- spending as a result of -- of -- solution has which affects the economy start often.
PNC -- and toughness from.
