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Deutsche Bank Securities Senior U.S. Economist Carl Riccadonna on the outlook for the economy and job market.
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-- a bevy of economic data out today initial jobless claims falling to 366000.
Last week.
The four week moving average for new claims is down to -- five year -- that's dead.
The US productivity fell 2% in the fourth quarter to its lowest level in nearly two years.
So what some mixed data say about our economic recovery joining me to break it all down his power to -- Deutsche Bank securities senior US economist.
What -- productivity number that jumped out of me -- and we see that big decline.
Well that the move a jobless claims it's certainly good move 350000.
Should be consistent with a pickup in employment.
And while over long periods of time slowing productivity of the negative economic development.
In the short term.
Actually I think it's good news because that means that the economy grows.
It will it will produce more job gains than it would in the high productivity environment so.
At this point of the economic cycle it's not unusual to see productivity slowing.
And frankly it's just what the doctor ordered so altogether it sounds like you think you're.
That these reports put together our -- bank.
I think that these reports combined did tell us that the -- pace of employment debt is going to -- at the very at least holds steady.
If not accelerate as the year wears on.
Hi this is very important because as he talked about the strong dollar in the prior segment.
That's going to hurt the export sector -- so was this year as we look at the 2013 economic outlook.
I it really depends on the domestic economy improving and that means that the labor market has to pick up and today's data are signs that that that could indeed be the case does it concern you know that we are seeing I mean I know this is an improvement but -- so little improvement after so long in the jobs picture you're concerned about that.
Well that I I certainly it's that concerning that that we've seen the tepid job gains that we have that at this point but.
The signs are pointing in the right direction -- force of acceleration.
Productivity slowdown positive I think gets the year wears on we're going to see the economy picking up steam.
Aside from this that Q1 pick up.
Which will be due to the -- in the payroll tax and other tax measures.
It does that because the outlook for the economy is constructive so yeah we will see this virtuous feedback loop but strengthening as that as the year wears on although of course a hazard to all of that is the situation that's going on right now with the sequestration and a lack of a -- did you think that would take -- -- On what you think is an overall improving picture.
Absolutely as we look at that the domestic private economy.
Things look good but that the risk -- that we can throw monkey wrench into the system so looking back to Q4 the Q4 GDP number.
I didn't look that great at the surface that we actually -- declined.
The underlying details painted a much stronger picture but if the overall economy is struggling along and right now we're only going at about one point 5%.
That's barely above stall speed for the economies of that -- -- growth rate of sustained.
Or even deteriorates due to a government shut down -- sequestration.
That all of those issues that that's certainly could be the monkey wrench that that these state.
Please use pretty constructive although I'm looking at the bottom of the screen -- you can -- -- year end target for GDP is 2.2 percent that's that's very that -- -- that doesn't create very many jobs well.
That's a little bit misleading because the profile will be so weak in the beginning of the year again as I mentioned the probably lingering about one point 5% in the first quarter.
But once we get beyond the sequestration.
Sin debt ceiling issues we're looking for the economy did to accelerate so.
2.2 with misleading because the beginning of the year will be about one and a half.
By the end of the year we're looking for 3% growth by Q4 if the economy is growing at a 3% pace you're gonna see job gains income growth.
Rising tax revenue all of those good things yeah absolutely -- thanks so much for coming -- we appreciate your time thank you.
