Gov. Phil Murphy doesn’t often make reference to his time as a global financial executive at Goldman Sachs. When he does, it comes with a background of knowledge that most politicians do not have.
Speaking last Friday at an event sponsored by the Meadowlands Chamber, the governor offered his take on the economy — saying it is at an interesting inflection point and a tale of two realities.
“One set of realities is pretty uncomfortable,” he said, noting high interest rates and inflation issues that he says are getting better — but have not necessarily been seen by the average consumer.
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This comes with unexpected wars in Ukraine and Israel that few saw coming — or see ending.
“You’ve got enormous geopolitical unrest right now,” he said. “And that is a reality that I fear will get worse before it gets better.”
On the other hand, the third-quarter Gross Domestic Product numbers for the U.S. were the best they have been in years, as the U.S. Commerce Department’s Bureau of Economic Analysis said third-quarter real GDP increased at an annual rate of 4.9%, exceeding expectations.
The increase in GDP is in large part due to Americans spending and making more, the Commerce Department said in releasing the numbers that it said show consumer spending in both goods and services is up 4% and personal disposable income (in current dollars) is up 1.9%.
Murphy said the state’s revenue numbers are meeting expectations (without giving data) and that unemployment is in a “very good historical place.”
What does all this mean? Even Murphy the banker told the audience he isn’t so sure.
“If we were together six or eight weeks ago, I would have said I think the soft-landing scenario is being given too much weight and the bumpier landing is being given too little weight,” he said. “I no longer feel that.”
He noted the stock market appears to be in a correction mode.
“I feel like markets have begun to adjust in a fairly sober way,” he said.
Murphy said he’ll approach the coming months the same way he would as a banker, worrying about the risks he can control rather than the ones he can’t — such as wars and the actions of the Federal Reserve.
In New Jersey, that means worrying about how the state compares to others.
“Where are we today as compared to other American states, particularly ones that we realistically compete with for businesses and families,” he said. “That’s where the overwhelming amount of our time is spent.”
For more from the fireside chat, see the video below.