TEXT OF INTERVIEW
Steve Chiotakis: The nation’s Gross Domestic Product rose at its quickest pace in at least 6 years — 5.7 percent in the 4th quarter. Let’s get some analysis of that from Chris Low, senior economist at FTN Financial. He’s with us live from New York. Good morning Chris.
Chris Low: Good morning. Boy it’s nice to hear that music for a change.
Chiotakis: Yeah, the up music. Exactly. So GDP was up. What does this mean? We heard from Christina Romer, White House chief economist, who says, all right, let’s not put too much into one number, right? There may be more bumps in the road ahead. But is this sustainable?
Low: I think it will be. I think the right way to look at this report is that this is the transition to sustainable that we need to see. It’s the first step.
Chiotakis: I want to talk a little about the stock market because here we are up today. If it does improve much higher, or if it doesn’t I should say, we’re going to see one of the worst months in a long time — in nearly a year. Why are investors so skittish?
Low: Well I’d say there’s three things people are focused on. One is Greece. Greece is teetering on the edge of default and the Europeans say they’re not going to bail it out. That would be really bad, for European banks especially who have a lot of exposure. The second is that China is tightening. China is the swing consumer of commodities, so if Chinese growth slows then global commodity demand drops off. And finally is the new populism in Washington, this sort of anti-business attitude which we’re hearing from the president but also, to some extent, from Republicans.
Chiotakis: Next week’s big number, Chris, is January employment. We’re going to get that report a week from today. What does 5.7 GDP mean for jobs?
Low: Well it ought to be good. At this stage, what I’m hearing from businesses is that orders are coming in. They’re still very cautious about hiring. But from more and more CEOs I’m hearing, gee, I might have to hire if the economy continues to grow at this pace.
Chiotakis: Chris Low with us from New York. Chris, thanks.
Low: You’re welcome.
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