Unemployment Rate
The “new normal” outlook is intact, Gross said May 3 after the U.S. unemployment rate fell in April to a four-year low of 7.5 percent. The nation’s gross domestic product rose at a 2.5 percent annualized rate in the first quarter following a 0.4 percent fourth-quarter advance, according to Commerce Department data.
“We don’t see higher real growth than 2 percent going forward,” Gross said in a radio interview on “Bloomberg Surveillance” with Tom Keene. “We’ve seen basically 3.5 percent nominal GDP growth even in the midst of an accelerating housing sector.” Gross, 69, couldn’t immediately be reached for comment yesterday about Buffett’s remarks, said Mark Porterfield, a Pimco spokesman.
The Pimco Total Return Fund advanced 10.4 percent last year and beat 95 percent of its peers, according to data compiled by Bloomberg.
Buffett, who is also Berkshire’s chief executive officer and oversees units that make bricks, paint and carpet, told shareholders that the housing market is improving.
‘Slow Progress’
“What we see is a slow progress in the American economy,” he said. “We’ll move forward but I don’t think we’ll be in any surge of any sort, but I don’t think we’ll stall either.”
While he’s open to deals in other nations, he said more opportunities may be in the U.S. He previously called his largest acquisition, the $26.5 billion purchase of the Burlington Northern Santa Fe railroad in 2010, an “all in wager” on the world’s largest economy.
Buffett will be aided in his hunt for deals by a cash pile that climbed to a record $49.1 billion as of March 31. Any amount of cash higher than $20 billion is “too much,” Buffett said in an interview with Bloomberg Television’s Betty Liu after the meeting.
Buffett’s comments on “new normal” were in response to a question about the prospects of people saving for retirement and whether they should expect lower returns.