US 'skating on the edge of a recession': Economist Steve Moore
Moore warns Washington must get inflation down or risk wrecking economy
Steve Moore warns US 'skating on the edge of a recession'
Economist Stephen Moore warns Washington must act on inflation or risk wrecking the U.S. economy.
Economist Steve Moore argued on Monday that the U.S. is "skating on the edge of a recession."
He also warned that Washington must get inflation down or risk wrecking the economy.
Moore made the argument on "Varney & Co." four days after it was revealed that gross domestic product (GDP), the broadest measure of goods and services produced across the economy, fell at a 1.4% annualized rate in the three-month period from January through March, noting that the number is "even below the worst" he thought it might have been.
Economist Stephen Moore, visiting fellow at the Heritage Foundation, warns Washington must get inflation down or risk wrecking economy. (Photographer: Andrew Harrer/Bloomberg via Getty Images / Getty Images)
The Commerce Department revealed in its first reading of the data on Thursday that the U.S. economy cooled markedly in the first three months of the year, as snarled supply chains, record-high inflation and labor shortages weighed on growth and slowed the pandemic recovery.
A recession refers to a contraction in gross domestic product (GDP) activity, the broadest measure of goods and services produced across the economy, for two consecutive quarters.
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Moore noted that the U.S. is not yet in a recession given a recession is defined as a contraction in GDP activity, for two consecutive quarters, and so far, there has been one quarter of negative growth.
"But we are certainly skating on the edge of a recession right now," he told host Stuart Varney, noting that inflation at 40-year highs is making the situation worse.
Harvard economist on 'shocking' contraction of US economy in Q1
Harvard University professor Kenneth Rogoff, a former chief economist at the International Monetary Fund, tells 'Mornings with Maria' that GDP falling at a 1.4% annualized rate is 'even below the worst' he thought it might have been.
The Labor Department said last month that the consumer price index (CPI) – which measures a bevy of goods including gasoline, health care, groceries and rents – rose 8.5% in March from a year ago, the fastest pace since December 1981, when inflation hit 8.9%. Prices jumped 1.2% in the one-month period from February, the largest month-to-month jump since 2005.
Price increases were widespread: Energy prices rose a stunning 11% in March from the previous month, and are up 32% from last year. Gasoline, on average, costs 48% more than it did last year after rising 18.3% in March on a monthly basis as the Russian war in Ukraine fueled a rapid increase in oil prices.
The inflation data for April will be released next week.
Washington must get inflation down or risk wrecking economy: Steve Moore
Economist Steve Moore weighs in on the current economic landscape, arguing that the U.S. is 'skating on the edge of a recession.'
"If you’re at the Fed, what do you do?" Moore asked, noting "if you raise rates, you are going to slow down the economy. If you don’t raise rates, you are going to have this inflation continue to rise."
"I would not want to be at the Fed right now," he continued. "They do not have any good choices…"
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Moore stressed that "job one has to be to bring the inflation rate down or you are going to see a continued decline in wages, you are going to see a continued decline in people’s savings, and you are going to see a continued decline in the real economy."
Federal Reserve Chairman Jerome Powell late last month solidified expectations for a half-percentage point rate hike at the central bank's May meeting as officials look to tame red-hot inflation.
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FOX Business’ Megen Henney contributed to this report.