Summers: We’ve Had ‘Essentially No GDP Growth’ with Stronger Core Inflation for Nine Months Despite Claims Inflation Will Come Down

During an interview aired on Friday’s edition of Bloomberg’s “Wall Street Week,” Harvard Professor, economist, Director of the National Economic Council under President Barack Obama, and Treasury Secretary under President Bill Clinton Larry Summers reacted to the third quarter GDP numbers by saying that we’ve had nine months of “essentially no GDP growth and inflation on core measures probably stronger than it was at the beginning of the nine months, suggesting that we’ve got real challenges ahead.” And that despite arguments that inflation will decline, it hasn’t actually declined.

Summers stated, “It confirmed what I think we knew, that, despite two negative quarters, the economy was not in any real sense in recession at this point. But if you look through the numbers to private, domestic demand, which is probably the best indicator of economic strength, it really wasn’t very strong, well below 1% for the third quarter. And so, I think what we’ve now had for nine months is essentially no GDP growth and inflation on core measures probably stronger than it was at the beginning of the nine months, suggesting that we’ve got real challenges ahead. There continue to be arguments that inflation rates are going to come down, but we haven’t yet seen them come down. So, I don’t think the fundamental picture that a soft landing remains an enormous and unlikely challenge is very different than it was before we got these numbers.”

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