U.S. economic figures have shown some strength lately, and part of the reason for that is politicians are staying out of the way, says Pimco CEO Mohamed El-Erian.
“The U.S. economy is on a bit of a roll. It’s building up momentum,” he tells CNNMoney. El-Erian cites recent improvement in jobs, retail sales and consumer sentiment data.
Retail sales jumped 1.1 percent in September, and the Thomson Reuters/University of Michigan preliminary October consumer sentiment index hit a five-year high of 83.1.
Editor's Note: You Owe It to Yourself to Know What Obama and Bernanke Are Hiding From Americans
Federal Reserve easing clearly deserves some of the credit for that improvement.
“Also politicians are frozen out of the system for a while. Everyone is waiting for the election to see what will happen next in Washington,” El-Erian says.
“What this tells you is if we get politicians out of the way, this economy can continue to heal.”
But we can’t do without Capitol Hill forever. “Now we need politicians to provide a tail wind. That’s about the fiscal cliff and other issues,” El-Erian says.
“More needs to be done to reach ‘escape velocity,’ which means [gross domestic product] growth of 3 percent.”
The economy expanded 1.3 percent in the second quarter.
Others share El-Erian’s cautious optimism.
There is “some resilience on the part of the consumer,” Michael Feroli, chief U.S. economist at JPMorgan Chase, told Bloomberg after the retail sales and consumer confidence data came out Friday. “We are going to continue to see slow, but steady, growth.”
Editor's Note: You Owe It to Yourself to Know What Obama and Bernanke Are Hiding From Americans
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