Published: Tue, August 20, 2019
Finance | By Kristine Clayton

Trump quashes fears of recession in United States

Trump quashes fears of recession in United States

US economists are growing more and more concerned about the impact of President Trump's economic policies.

"I don't think we're having a recession, " President Trump told reporters as he returned to Washington from his New Jersey golf club. "We're doing tremendously well".

Trade between the United States and China, the two biggest global economies, has plunged.

Kudlow and White House Office of Trade and Manufacturing Policy Director Peter Navarro, Trump's trade adviser, made multiple appearances on Sunday talk shows to discuss the economy and China trade prospects after a tumultuous week in financial markets that included an 800-point dip in the Dow Jones Industrial Average on Wednesday, its worst rout of the year.

"Of the 98 percent of respondents who believe a recession will come after 2019, the panel is split regarding whether the downturn will hit in 2020 or 2021", NABE President Constance Hunter, chief economist at KPMG, said in a statement. "Our consumers are rich", Trump told reporters on Sunday. "They're loaded up with money".

"This sort of recycling won't clear the oceans of plastic or reduce global warming, but it is an elegant solution to reducing the pain of tariffs on the American consumer of China and may give equity markets a small boost as we start the week", said Jeffrey Halley, senior market analyst for Asia-Pacific at Oanda.

A survey by the National Association for Business Economics found almost 4 in 10 economists expect a recession next year, though an even larger share (48%) don't expect a downturn until 2021 or later.

"There is no recession in sight", Kudlow said.

On CNN, President Trump's Trade Adviser Peter Navarro disputed that the USA had seen an inverted yield curve, often a forerunner of recession because it signals market expectations for weaker growth ahead. "China would like to make a deal".

While the economists in the NABE survey generally saw recession coming later than they had in February, the latest survey was taken between July 14 and August 1 - before the financial markets last week signalled the possibility of a U.S. recession, sending the Dow Jones Industrial Average into its biggest one-day drop of the year. "They are spending and they are saving". "And let me add just one theme.We're doing pretty darn well, in my judgment".

There remains a high level of concern about the global outlook and particularly the US economy after yields on 10-year US Treasury bonds last week slid below that of the two-year note, while the 30-year yield fell below two per cent for the first time ever.

Kudlow also looked to refocus attention on economic gains under Trump, saying on NBC, "We had some blockbuster retail sales, consumer numbers towards the back end of last week". Stocks were up more than 1% in early trading Monday.

Economists are skeptical about a resolution to Trump's trade wars, although 64 percent said a "superficial agreement is possible", Nabe said.

Trump said a larger trade deal with China may have to wait.

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