Trump dismisses fears of recession

Key aides say consumers spending, saving more while blaming Fed for holding back economy

Berkeley Heights, N.J. — President Donald Trump said Sunday the economy is “doing very well” and dismissed concerns of recession, offering an optimistic outlook after last week’s steep drop in the financial markets.

“I don’t think we’re having a recession,” Trump told reporters as he returned to Washington from his New Jersey golf club. “We’re doing tremendously well. Our consumers are rich. I gave a tremendous tax cut and they’re loaded up with money.”

Larry Kudlow, Trump’s top economic adviser, also played down fears of a looming recession and predicted the economy will perform well in the second half of 2019. In Sunday television interviews, he said that consumers are seeing higher wages and are able to spend and save more.

“No, I don’t see a recession,” Kudlow said. “We’re doing pretty darn well in my judgment. Let’s not be afraid of optimism.”

A strong economy is key to Trump’s re-election prospects. Consumer confidence has dropped 6.4 percent since July. The president has spent most of the week at his golf club in New Jersey with much of his tweeting focused on talking up the economy.

Kudlow acknowledged a slowing energy sector, but said low interest rates will help housing, construction and auto sales.

Kudlow also defended the president’s use of tariffs on goods coming from China. Before he joined the administration, Kudlow was known for opposing tariffs and promoting free trade during his career as an economic analyst. Kudlow said Trump has taught him and others that the “China story has to be changed and reformed.”

“We cannot let China pursue these unfair and unreciprocal trading practices,” Kudlow said.

Last month, the Federal Reserve reduced its benchmark rate — which affects many loans for households and businesses — by a quarter-point to a range of 2 percent to 2.25 percent. It’s the first rate cut since December 2008 during the depths of the Great Recession. Federal Reserve Chairman Jerome Powell stressed that the Fed was worried about the consequences of Trump’s trade war and sluggish economies overseas.

Breaking with historical norms, Trump has been highly critical of Powell as he places blame for any economic weakness on the nation’s central bank for raising interest rates too much over the past two years.

Peter Navarro, who advises Trump on trade policy, shared that sentiment.

“The Federal Reserve chairman should look in the mirror and say, ‘I raised rates too far, too fast, and I cost this economy a full percentage point of growth,’” Navarro said.

Navarro also said that U.S. consumers are not affected by the administration’s trade war with China, though tariffs are taxes paid by U.S. importers, not by China, and are often passed along to U.S. businesses and consumers through higher prices.

Trump admitted at least a potential impact when he paused a planned 10 percent tariff hike for many items coming from China, such as cellphones, laptops, toys, shoes and clothing.

“We’re doing (it) just for Christmas season, just in case some of the tariffs could have an impact,” the president told reporters in New Jersey.

“I don’t think we’re having a recession. We’re doing tremendously well. Our consumers are rich. I gave a tremendous tax cut and they’re loaded up with money.” PRESIDENT DONALD TRUMP