Kudlow: US to Maintain 3% Growth Even Without China Pact
By Newsmax Finance Staff | Tuesday, 11 June 2019 02:25 PM
White House economic adviser Larry Kudlow predicts the U.S. economy will maintain 3% pace even without a China trade deal.
“The U.S. economy is very strong,” the veteran financial guru and former Ronald Reagan adviser told CNBC. “I think we’re in pretty good shape and I think we’ll maintain a 3% growth pace this year,” said Kudlow, who served as the Trump campaign's senior economic adviser.
The economy grew at a 3.1% pace in the first quarter.
“That 3% number is not contingent on a China deal that might not be satisfactory for American economic interests,” said Kudlow, who worked as Reagan’s budget deputy between 1981 and 1985.
“What has changed is lower tax rates, massive deregulation, opening up the energy sector and various trade reforms,” said Kudlow, assistant to the president for economic policy and director of the White House’s National Economic Council that advises Trump.
Meanwhile, the Atlanta Federal Reserve’s GDPNow forecast model showed on Friday that the U.S. economy is growing at a 1.4% annualized rate in the second quarter based on data that showed a weaker-than-forecast payrolls growth in May, Reuters reported.
This was a tad slower than the 1.5% pace estimated by the Atlanta Fed’s GDP program on Thursday.
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2019 is 1.4 percent on June 7, down from 1.5 percent on June 6. The nowcast of second-quarter real government expenditures growth decreased from 2.0 percent to 1.7 percent after Friday's employment report from the U.S. Bureau of Labor Statistics.
The Atlanta Fed revision came hours after the government said U.S. job growth slowed sharply in May and wages rose less than expected, raising fears that a loss of momentum in economic activity could be spreading to the labor market, which could put pressure on the Federal Reserve to cut interest rates this year.
The broad cool-off in hiring reported by the Labor Department on Friday was even before a recent escalation in trade tensions between the United States and two of its major trading partners, China and Mexico. Analysts have warned the trade fights could undermine the economy, which will celebrate 10 years of expansion next month, the longest on record.
Adding a sting to the closely watched employment report, the economy created far fewer jobs in March and April than previously reported.
The economy thus far has been largely resilient to the trade war with China. President Donald Trump in early May slapped additional tariffs of up to 25% on $200 billion of Chinese goods, which prompted retaliation by Beijing.