The progression of positive jobs numbers since the start of 2015 posts a far better reflection of the economy than the negative first quarter GDP report, says Scott Anderson, Chief Economist for Bank of the West. ‘There have been some seasonal adjustment issues with the GDP number like bad weather on the east coast, and the west coast port shutdown weighed heavily on the economy was well,’ says Anderson about the -0.7% Q1 GDP figure. ‘And even though the GDP number was weak in the first quarter, we didn’t see it impact the job market too much.’ Anderson believes the U.S. economy can maintain growth of 200,000 jobs a month or better for the rest of the year. As for inflation, Anderson does not see it as much of a problem at all despite core CPI for April coming in above Wall Street estimates at 0.3%. ‘Inflation is still too low by the Fed’s standards. They want to move core consumer inflation back up to 2% and we are trending at 1.5%,’ says Anderson. As for the all-important consumer, Anderson says this summer will see a burst of spending as Americans hit the highway to enjoy their vacations. ‘The consumer is the key and that’s what we are basing our prediction for a second half rebound on,’ says Anderson. ‘One reason why we didn’t see a big jump in consumer spending in the first quarter is because they thought the drop in gasoline prices was temporary so they saved it.’ For evidence of the U.S. consumer coming out of his or her shell, Anderson points to the impressive May auto sales figures released this week. The industry sold a seasonally adjusted annual rate of 17.7 million-units, the highest level since July 2005.
Subscribe to TheStreetTV on YouTube:
For more content from TheStreet visit:
Check out all our videos:
Follow TheStreet on Twitter:
Like TheStreet on Facebook:
Follow TheStreet on LinkedIn:
Follow TheStreet on Google+:
source
