Lazear: Boeing strike, hurricanes led to negative GDP

The chairman of President Bush’s council of economic advisers said the country’s gross domestic product would have been positive had it not been for two hurricanes and a strike at Boeing. 

The administration announced earlier Thursday that the GDP had dipped 0.3 percent in the third quarter, a reflection of the tough economic situation. Two consecutive quarters of negative growth are the classic definition of a recession, and experts believe the GDP could shrink again in the fourth quarter.

{mosads}However, Ed Lazear, who chairs the council of economic advisers, said growth would have been positive had it not been for the strike and the hurricanes.

“There’s no question that the economy has slowed. Whether you think of this as flat or slightly negative, the message is basically the same,” Lazear said on CNBC.

However, he touted the administration’s response to the crisis.

“I think we're addressing the issue appropriately. The rescue plan is directed at the credit markets, which is the source of the problem,” Lazear stated. “And we believe that where we’re going to have a tough few months ahead of us, but we’ve taken the steps to ensure that the next administration will be off to a good start with a potential for a strong rebound and solid growth early in the administration.”

He noted that there are “some good signs,” such as lower energy costs and “a little bit of action on the housing front in terms of sales.”