Last week, the U.S. Commerce Department released data showing the country’s gross domestic product grew 4.9% better than expected.
Russell Weaver, economic geographer and research director at the Cornell ILR Buffalo Co-Lab, told Capital Tonight that “last week’s economic report had a lot of good news,” but adds that the data contains “some warning signs.”
The GDP growth data is based on speculation by economists that a recession is imminent and the Federal Reserve has raised interest rates. Weaver said strong GDP growth was boosted by consumer and “significant” government spending in the third quarter of 2023. The GDP data followed a September jobs report that showed job growth doubled expectations.
Despite the strong economic indicators, Americans are typically not confident about the state of the economy. The latest Gallup poll shows that only 20% of respondents believe the economy is in excellent or good shape.
One warning sign Weaver pointed out was a decline in Americans’ disposable income. While Americans are spending more, they are able to spend less, due in part to inflation. The Federal Reserve has set a 2% inflation target and has raised interest rates to reduce inflation, which is at 3.7%, and cool the labor market.
Given the good news and warning signs, Weaver said the economy is in a “gray area” and all indicators are “trending in the right direction,” but added, “Given international conflicts, rising property prices and uncertainty, that’s subject to change.” Moment.”
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