On Thursday’s broadcast of Fox Business Network’s “Kabuto: Coast to Coast,” White House Council of Economic Advisers Chairman Jared Bernstein said the White House has no problem with the latest GDP report. Stated. Some of these more volatile elements, consumer spending and investment, look great. ” and “the underlying economy remains strong.”
Guest host Edward Lawrence said, “If you dig deeper into this GDP report…you’ll see that personal consumption increased by 2.5% in the first quarter, and non-defense government spending increased by 0.3%, but in the fourth Looking back at the quarter, government spending on defense increased by 4.8%. So, did government spending push up GDP? Is there a correlation?
Mr. Bernstein replied: Private consumption is 70% of nominal GDP, and when investment is added he exceeds 80%. Now, if you look at the results of this first quarter, personal consumption, real spending, and investment all increased at an annual rate of 3%. And think of it as almost, almost the core GDP indicator. That’s minus the more volatile inventories, net exports, and even government balances, which can fluctuate up and down. That’s why we think, as you heard earlier from Esther George, that underlying growth remains stable, solid and strong. ”
Mr. Lawrence then asked, “So, is this GDP report okay?”
Mr. Bernstein replied: “Well, I think this GDP report, especially when you go under the hood, removes some of the more volatile elements and makes consumer spending and investment look great. In fact, GDP is up 3% year over year. That’s a huge number. And look, the average GDP growth rate since the president has been here is about 3%, which is the 25th consecutive year that the president has been in office. Add in a very strong job market…and you can see that the underlying economy remains strong.”
“Let’s not overinflate the index in one quarter,” Bernstein added. “As we grow at breakneck speed from the pandemic-induced recession, we have to get back to more steady, steady growth. That’s one of the things we’re seeing in reports like this morning. think.”
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