El-Erian Says Latest Economic Data Shows No Reason For US To Fall Into Recession – Invesco QQQ Trust, Series 1 (NASDAQ:QQQ), SPDR S&P 500 (ARCA:SPY)

Allianz chief economic adviser and noted economist Mohamed El-Erian has expressed confidence in the latest set of economic data releases saying they align with his view the U.S. may not fall into recession.

“The latest data releases are consistent with my long-held view that there is no reason for the US to fall into #recession unless there is a huge exogenous shock and/or another Federal Reserve policy mistake,” El-Erian said in his tweet.

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The economist highlighted the rise in The Conference Board Consumer Confidence Index which increased to 109.7 in June from 102.5 in May, hitting the highest level since Jan. 2022. Dana Peterson, Chief Economist at The Conference Board pointed out that greater confidence was most evident among consumers under age 35 and consumers earning incomes over $35,000. However, she did point out that the expectations gauge continued to signal consumers anticipating a recession at some point over the next 6 to 12 months.

Housing Market: El-Erian also highlighted the upbeat housing market data. U.S. new home sales rose in May, reaching the highest level since Feb. 2022, as the housing market continues to rebound amidst a shortage of previously owned homes. New home sales jumped 12.2% to a seasonally adjusted annual rate of 763,000 units in May, marking a significant rise from April’s revised sales pace of 680,000 units.

What is notable is the fact that the rise in home sales comes in the backdrop of the prevailing high-interest rate environment following aggressive rate hikes by the central bank. Wall Street cheered the latest set of upbeat economic data. The Nasdaq Composite and the S&P 500 ended over 1% higher on Tuesday. The SPDR S&P 500 ETF Trust (NYSE:SPY) closed 1.1% higher while the Invesco QQQ Trust Series 1 (NASDAQ:QQQ) gained 1.72% on Tuesday, according to Benzinga Pro.

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