Gross Domestic Product fell at an annualised pace of 1.4% in the first quarter of 2022, reported the U.S. Commerce Department on Thursday. This compared to about a 1.0% growth expected.
Jim Cramer: soft landing is possible
Traditionally, recession is defined as two successive quarters of GDP decline. Still, influential investor Jim Cramer is convinced the U.S. central bank can manage a soft landing. On CNBC’s “Squawk on the Street”, he said:
Everybody thinks that inflation is too hot and very few people think that Jerome Powell can navigate a soft landing. But I think he can. But the Fed can’t relax. The companies this morning and last night all except two delivered numbers I really like.
A day earlier, Leuthold Group’s Jim Paulsen also said the U.S. inflation has likely peaked and we’ll see a soft landing ahead.
Ian Shepherdson: we’re not heading into recession
Despite inflationary pressures, consumer spending remained resilient, rising 2.7% in the first quarter. Who also agrees that recession is not on the cards is Pantheon Macroeconomics’ Ian Shepherdson.
This is noise; not a signal. The economy is not falling into recession. Net trade has been hammered by a surge in imports. This can’t persist much longer. Imports will drop outright and net trade will boost GDP growth in Q2 and/or Q3.
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