A favorable trade deal would be “very good” for China’s economy as well as for the United States, Chairman of the Council of Economic Advisers Kevin Hassett said Monday.
“I think right now there’s been almost a freeze on capital spending over there because people are worried that maybe there’s not going to be a deal,” Mr. Hassett said on TV early Monday. “I think if we open up Chinese markets to US firms, US farmers, to Nat Gas producers, and people with intellectual property they didn’t move over there because they are worried it might get stolen, there would be a massive amount of new business.”
Meanwhile, the Atlanta Fed Friday issued the GDP forecast for the first quarter at .3%, a low figure that could improve if there is another large number of jobs posted.
“We are going to get jobs again this week,” said Mr. Hassett. “If we get another really big number, we will have a lot of confidence that something as low as 3/10 is not going to happen.”
He also discussed capital expenditure spending, noting that this year, a little less is expected from last year’s 9% amount, but still, “we are going to get plenty of output because all of the machines we bought and the factories we built last year will produce output this year.”
Consumer spending, meanwhile, is holding steady, with people spending “what they earn, a little bit less,” and the savings rate is “seasonable and savings is funding an investment boom,” said Mr. Hassett, adding that it is “hard to think of a sweeter spot for the economy to be in.”