FLASH: White House economic adviser Larry Kudlow predicts the US economy will maintain 3% pace without a China trade deal.
“The US economy is very strong, I think we are in pretty good shape and I think we’ll maintain a 3% growth pace this year,” said Mr. Kudlow, who served as The Trump Campaign’s senior economic adviser.
The economy grew at a 3.1% pace in Q-1.
“That 3% number is not contingent on a China deal that might not be satisfactory for American economic interests,” he said.
“What has changed is lower tax rates, massive deregulation, opening up the energy sector and various trade reforms,” said the assistant to the President for economic policy and director of the White House’s National Economic Council that advises President Trump.
This was a tad slower than the 1.5% pace estimated by the Atlanta Fed’s GDP program last Thursday.
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in Q-2 of Y 2019 is 1.4% on 7 June, down from 1.5% on 6 June. The nowcast of Q-2 real government expenditures growth decreased from 2.0 to 1.7% after Friday’s employment report from the US Bureau of Labor Statistics.
The Atlanta Fed revision came hours after the government said US NFPs 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 Fed to cut interest rates this year.
The broad cool-off in hiring reported by the Labor Department Friday was even before a recent escalation in trade tensions between the United States and 2 of its major trading partners, China and Mexico.
Some analysts warn 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.
So far, the US economy resilient to the trade dispute with China.
In early May, President Trump imposed additional tariffs of up to 25% on $200-B of Chinese goods, which prompted some limited retaliation by Beijing.
Tuesday, the major US stock market indexes finished at: DJIA-14.17 at 26048.51, NAS Comp-0.60 at 7822.55, S&P 500 -1.01 at 2885.72
Volume: Trade on the NYSE came in at 866-M/shares exchanged
- NAS Comp +17.9% YTD
- S&P 500 +15.1% YTD
- Russell 2000 +12.7% YTD
- DJIA +11.7% YTD
HeffX-LTN’s overall technical outlook for the major US stock market indexes is Neutral to Bullish in here.