Economist Mohamed El-Erian highlighted the risks of an economic slowdown as Federal Reserve Chairman Jerome Powell reiterated that the economy was growing at a “solid pace” during his Friday address at the University of Chicago.
What Happened: During a podcast with Forward Guidance, the chief economic advisor at Allianz, El-Erian underscored “two disturbing data” sets on the stagflation side.
This included a fall in February’s ISM Manufacturing New Orders Index, which contracted to 48.6% after expanding for three months, indicating a weakening demand and a decline in new orders compared to the previous month.
The other data set highlighted by El-Erian included February’s job report, wherein nonfarm payrolls increased by 151,000 and the unemployment rate rose to 4.1%, the highest in 3.5 years, thus inducing uncertainty in the labour market. However, “one qualification is the slip in labor force participation,” from 62.6% to 62.4%, according to him.
“So the concern that we all have, is that while growth is slowing down, companies will feel that they need to pass on the higher costs into higher prices, of course that’s why tariffs play a major role because people are worried that it won’t be a once and for all effect, it may …
