Mark Zandi says people have never been so pessimistic about the US economy in his 30 years of forecasting. He explains why they are wrong,
Mark Zandi, who has been an economist for more than three decades, says he’s never seen so many people convinced that aAnd while he believes the US economy can still avoid such an economic downturn, sentiment is so poor that it poses its own risk – a sort of self-fulfilling recession prophecy. Zandi, the chief economist at Moody’s Analytics, joined the “What Goes Up” podcast to discuss his outlook after government data this week showed the highest level of inflation in almost 41 years.
Q: When you downgraded your GDP growth outlook, you said odds remain that the economic expansion will continue. What specifically were you thinking there? For the typical American household, by my calculation, as of June they had $US7000-$US8000 in excess savings. So if I’m paying $US500 more a month for the higher inflation and I have $US7000-$US8000 in excess savings, you can do the arithmetic. That buys me a little bit of time, right? I can use that excess savings to supplement my income, to offset the ill effects of the high inflation.Debt is low. Debt service burdens are about as low as they’ve ever been.
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