Tags: El-Erian | global | economic | slowdown

El-Erian: Global Economic Slowdown Remains a Concern

By    |   Saturday, 25 October 2014 11:55 AM

While the U.S. stock market may have rebounded sharply from its recent plunge, that doesn't mean all is hunk dory with the global economy, says former Pimco CEO Mohamed El-Erian.

Indeed economic sluggishness overseas remains a concern for financial markets and central bankers alike, he said at a recent investment conference in New York, The Wall Street Journal reports.

Though the U.S. economy grew an annualized 4.6 percent in the second quarter, eurozone GDP rose only 0.8 percent year on year, and Japan's economy contracted an annualized 7.1 percent.

Even in the United States, the job market isn't as strong as it looks at first glance, El-Erian said. The labor-force participation rate hit a 36-year low of 62.7 percent in September.

The rallies in U.S. stocks and bonds over the past five years stem largely from Federal Reserve easing, he said.

But that stimulus hasn't been matched by actions from U.S. politicians to boost the economy, such as increased infrastructure spending and reform of corporate taxation and immigration, El-Erian said.

Meanwhile, Dan Alpert, managing partner of investment bank Westwood Capital, is worried that the global slowdown will spark deflation—a period when prices actually fall, reinforcing economic weakness.

"The problem is that when you have this global deflationary pressure that is bearing down on the advanced nations, that’s even affecting the emerging nations, that’s a big problem," he told Yahoo. "And the big problem is that eventually prices are going to start to fall."



http://blogs.wsj.com/moneybeat/2014/10/23/el-erian-world-remains-stuck-in-new-normal/

http://finance.yahoo.com/news/-deflationary-pressure-is-bearing-down--on-global-economy--dan-alpert-005728428.html



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While the U.S. stock market may have rebounded sharply from its recent plunge, that doesn't mean all is hunk dory with the global economy, says former Pimco CEO Mohamed El-Erian.
El-Erian, global, economic, slowdown
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2014-55-25
Saturday, 25 October 2014 11:55 AM
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