Piper Sandler chief global economist Nancy Lazar joined “Mornings with Maria” Monday to discuss the state of the economy in the face of rising inflation, arguing that the US is facing a “very significant slowdown.”
NANCY LAZAR: So here in the United States, I don’t think we’re going to have a recession. We actually spent the past week going over our recession risk index, and it is not signaling a recession… for the next year or so. But we are forecasting a very significant economic slowdown with growth, US GDP growth slowing down to about one percent, and the ISM, the PMI, which a lot of people look at moving down to 50. So that is a very significant slowdown.
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… In particular, you’re going to see a lot of weakness on the consumer side of the equation where you had demand was pulled forward because of the COVID crisis, where a lot of goods. And now you’re going to see a natural decline in consumer spending on those goods. So within GDP, a lot of volatility and a lot of this version with the consumer weak housing, weak capital spending actually being okay on the Eurozone economy, they’re not so lucky.
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We actually do have a push on when it comes to the price of oil. Capital spending actually gets a boost when you do see higher oil prices because the oil industry does increase CapEx. So we’re not as exposed to higher energy costs as unfortunately, the Eurozone is. So in sharp contrast, I do think the Eurozone economy is going to have a recession, but quite frankly, they could pull the global economy also into a recession.
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