The Economy’s Mixed Signals
- GDP growth revised up, but tariffs may lead to export 'snapback'
- Inflation remains a major concern despite GDP gains
- White House must be more transparent about economic challenges
The Economy’s Mixed Signals: A Conversation with Dr. Matt Will
The latest GDP numbers are in, and they’re sending mixed signals about the state of the economy. On one hand, the growth rate is impressive, with a four-point-four percent increase. On the other hand, inflation is on the rise, and the market is sending warning signs. Tony Katz was joined by Dr. Matt Will, an economist at the University of Indianapolis, to break down the numbers and make sense of the economic landscape.
As we discussed the GDP numbers, Dr. Will pointed out that the Atlanta Fed is now projecting a five-to-five-point-four percent GDP in the next report, a significant revision from previous estimates. “The numbers are an absolute conflict, seemingly to me, with one another,” he said. “But let’s start with this GDP number. Now I know you’re in transit right now. Did the numbers get revised up or is the GDP was the four-point-four the number? Is that the correct number for the third quarter of twenty-twenty-five?”
Dr. Will explained that the GDP revisions are indeed up, with the actual GDP being revised from three-point-eight to four-point-four. He also highlighted the impact of tariffs on the economy, which is causing the GDP to go up, but may ultimately lead to a “snapback” in exports. “The tariff caused the GDP to go up. But this is a flaw of Keynesian economics, and we’ve talked about it before. It’s a nerd topic. Candy and Economics says that when you have net exports that increases GDP, that’s just the formula. The formula is flawed, but it decreases long-term consumer goods, harms long-term manufacturing in your country.”
As we dug deeper into the conversation, we touched on the topic of inflation, which is a major concern for many economists. Dr. Will pointed out that the inflation index is still a concern, despite the GDP growth. “The inflation was half a percent, that is six percent for the year. If it’s half a percent for the month, this inflation is not gone.” He emphasized that the market is taking the inflation into account, but still seeing the benefits of the GDP growth.
Throughout our conversation, Dr. Will provided valuable insights into the economic landscape, from the impact of tariffs to the importance of considering the long-term effects of economic decisions. As we wrapped up our discussion, he emphasized the need for the White House to be more transparent about the economic challenges facing the country. “He’s got to explain to the American public what’s going on here, and they’re ignoring the inflation issue. And you see the inflation issue when you go out to dinner, when you try to buy your kids a baseball bat, when you try to do things for your family and you can’t do it.”
If you’re interested in understanding the complexities of the economy and how they impact your daily life, this segment is a must-listen. Dr. Matt Will’s expertise and insights provide a clear and concise explanation of the economic landscape. Tune in to hear the full conversation and gain a deeper understanding of the economy’s mixed signals.
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