‘Doesn’t Look Like We’re In A Recession’: CNBC Anchor Says 2.6% GDP Number Could Signal ‘Soft Landing’ For Economy

CNBC host Joe Kernen said the newest GDP report “doesn’t look like we’re in a recession,” and wondered if the latest news could portend a “soft landing” for the economy.

President Joe Biden — along with many economists, fact-checkers, news outlets, and Fox News personalities from several years ago — has consistently said that the two consecutive quarters of negative GDP growth don’t necessarily mean the United States is in a recession, especially given other positive economic indicators. But many critics have slammed Biden, suggesting he’s in denial about a recession.

On Thursday’s edition of CNBC’s Squawk Box, Kernen suggested Biden may have been correct, at least for now.

Co-host Rick Santelli read off a set of brand-new economic numbers that included a 2.6 percent increase in Gross Domestic Product and a significant slowing in a key inflation indicator, the PCE price index:

• “Real gross domestic product (GDP) increased at an annual rate of 2.6 percent in the third quarter of 2022 (table 1), according to the “advance” estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP decreased 0.6 percent.”
• “The price index for gross domestic purchases increased 4.6 percent in the third quarter, compared with an increase of 8.5 percent in the second quarter (table 4). The PCE price index increased 4.2 percent, compared with an increase of 7.3 percent. Excluding food and energy prices, the PCE price index increased 4.5 percent, compared with an increase of 4.7 percent.”

When Santelli tossed back to the studio, Kernen observed that these indicators don’t look like a recession, and asked Stifel Chief Economist Lindsey Piegza if the market reaction to the report portends a “soft landing.”

Piegza wasn’t so sure, but called the numbers a “welcome reprieve” and a “feather in the cap” for the Fed:

JOE KERNEN: I don’t know how to interpret it. Lindsey, I’ll start with you. I don’t know if you’ve weighed in yet, but is it possible that with the PCE easing a little bit and we’re, doesn’t look like we’re in a recession, that’s a pretty good number. Can we extrapolate to, say, some people think a soft landing is possible, maybe we can raise rates, maybe we can bring inflation down a little, but the economy can survive? Is that why stocks are up?

LINDSEY PIEGZA: Well, I think the third quarter number was certainly better than expected, as Rick laid out. But I would caution to say that this is an indication of sustainable upward momentum and more reflection of static support, particularly to the consumer, as we saw lower gas prices, as we saw additional state and local stimulus come down the pipeline, consumers increasingly willing to draw down what remaining savings they have and turn to credit cards. So I don’t think that we’re seeing upward momentum in any of the components in the third quarter report. And in fact, also, as pointed out, durable goods, when we strip out those other components and look at the the core of business investment, is starting out the fourth quarter, particularly weak. So I do think this was a welcomed reprieve relative to six months of negative growth at the start of the year. But this is hardly indicative of strength for the underlying economy. That being said, it will be a feather in the cap for the Fed, who is focused entirely on reinstating price stability. And with prices still near a four-decade high, there is no indication that they will deviate from the current pathway to higher rates.

Watch above via CNBC’s Squawk Box.