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U.S. GDP falls 1.4%: ‘I think Powell can navigate a soft landing’

By:
on Apr 28, 2022
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  • The U.S. GDP fell at an annualised pace of 1.4% in the first quarter of 2022.
  • Mad Money host Jim Cramer says Fed Chair can still navigate a soft landing.
  • Pantheon Macroeconomics' Ian Shepherdson doesn't see a recession ahead.

Gross Domestic Product fell at an annualised pace of 1.4% in the first quarter of 2022, reported the U.S. Commerce Department on Thursday. This compared to about a 1.0% growth expected.

Jim Cramer: soft landing is possible

Traditionally, recession is defined as two successive quarters of GDP decline. Still, influential investor Jim Cramer is convinced the U.S. central bank can manage a soft landing. On CNBC’s “Squawk on the Street”, he said:

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Everybody thinks that inflation is too hot and very few people think that Jerome Powell can navigate a soft landing. But I think he can. But the Fed can’t relax. The companies this morning and last night all except two delivered numbers I really like.

A day earlier, Leuthold Group’s Jim Paulsen also said the U.S. inflation has likely peaked and we’ll see a soft landing ahead.

Ian Shepherdson: we’re not heading into recession

Despite inflationary pressures, consumer spending remained resilient, rising 2.7% in the first quarter. Who also agrees that recession is not on the cards is Pantheon Macroeconomics’ Ian Shepherdson.

This is noise; not a signal. The economy is not falling into recession. Net trade has been hammered by a surge in imports. This can’t persist much longer. Imports will drop outright and net trade will boost GDP growth in Q2 and/or Q3.

The benchmark S&P 500 index is up 1.5% on Thursday; still down more than 10% for the year.

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