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Last month the U.S. consumer prices rose 0.3 percent, according to the Labor Department and the U.S. economy expanded at an annual rate of 2.1 percent in the second quarter of the year, according to the estimate released by the Bureau of Economic Analysis.
However, El-Erian noted that the U.S. would likely inherit some of the global weakness from abroad.
“We are a very strong house in a deteriorating global neighborhood,” he said. “So we may slow to 2 to 2.5 percent growth, but we’re not going into a recession unless we make a big policy mistake.”
So what blunder would cause a downturn?
“If we shut down the government for two to three months… That would dampen consumption investments immediately,” El-Erian explained.