Top Economist Issues Warning About Potential Recession

[Screenshot CNBC Squawk Box]

Brianna Lyman News and Commentary Writer
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A top economist issued a warning Wednesday about a potential impending recession despite news that the GDP rose by 2.9%.

PIMCO economist Tiffany Wilding joined CNBC’s Squawk Box to discuss the new GDP numbers. Real GDP grew at a 2.9% rate in the third quarter of 2022, up from a 0.6% decline in the second quarter, data shows. The Bureau of Economic Analysis said real GDP increased from the second to third quarter due to an increase in exports, consumer spending, nonresidential fixed investment and government spending.

“If you dig into the details of the third quarter GDP number, what you find is that when you exclude those more volatile categories, growth was actually pretty subpar,” Wilding said. “Core growth has decelerated quite a bit and that’s even before you really start to feel the effects of Fed policy and Fed tightening.”

Wilding said PIMCO expects a recession in the near future despite hopes that the U.S. could avoid one. (RELATED: Biden Asks Officials To Prep For Possibility Of 2008-Level Financial Crisis: REPORT)

“We do think the economy slips into a recession next year under the weight of the financial conditions tightening that we’ve seen so far. But nevertheless, of course, it’s always good news to have some slight upper revisions to the third quarter GDP growth.”

The Biden administration has claimed that the U.S. is not in a recession, though President Joe Biden said in October that while he doesn’t think there would be a recession, “if there is, it’ll be a slight recession, that is, we’ll move down slightly.”

The White House has argued that months of negative GDP growth did not meet the “technical definition” of a recession, which, according to the National Bureau of Economic Research, is a “significant decline in economic activity that is spread across the economy and that lasts more than a few months.”