Editor’s note: Interesting transition of the public debate from (1) “tariff armageddon will crash the economy” to (2) “oh my, China is indeed a bad actor, the pain may be worth it” to (3) “maybe there is not much pain, and a lot more gain right now”
Larry Kudlow, director of the National Economic Council, said Tuesday that the U.S. economy will continue to grow at a strong pace through the rest of 2019 even if the U.S. and China don’t reach a trade deal.
[Fred Imbert | June 11, 2019 | CNBC]
“The U.S. economy is very strong,” Kudlow told CNBC’s “Power Lunch. ” “I think we’re in very good shape and I think we’ll maintain a 3% growth pace this year.”
“That 3% number is not contingent on a China deal that might not be satisfactory for American economic interests,” Kudlow added. “What has changed is lower tax rates, massive deregulation, opening up the energy sector and various trade reforms.”
Equity markets fell sharply in May after China and the U.S. hiked tariffs on billions of dollars worth of each other’s goods. Prior to that, officials on both sides indicated that progress was being made on the trade front. This led financial markets to price in a resolution of the U.S.-China trade spat.
Kudlow also shrugged off the release of weaker-than-expected economic data from last week.
The U.S. economy added just 75,000 jobs last month, the Labor Department said Friday. Economists polled by Dow Jones expected a gain of 180,000 jobs. Meanwhile, manufacturing activity in the U.S. grew last month at its slowest pace since October 2016.
“I wouldn’t put much stock in one month’s jobs number. There’s lots of other evidence” of a strong economy, Kudlow said, highlighting an upbeat NFIB small business survey and a record number of hirings in April.
Read the original article here.