Will America Talk Itself Into a Recession? Trump’s Advisers Are Worried
ImageConsumer spending increased at an annualized rate of 4.7 percent in the spring, the Commerce Department said on Thursday, its fastest quarterly increase in nearly five years.
Consumer spending increased at an annualized rate of 4.7 percent in the spring, the Commerce Department said on Thursday, its fastest quarterly increase in nearly five years.CreditCreditFrederic J. Brown/Agence France-Presse — Getty Images
By Jim Tankersley and Jeanna Smialek
Aug. 30, 2019
164
President Trump’s economic advisers do not see a recession on the horizon, but they worry that gloomy news reports and a drumbeat of recession warnings could turn fear of one into reality.
In an interview on Thursday, the acting chairman of Mr. Trump’s Council of Economic Advisers, Tomas Philipson, said that reporters who had fixated on possible signs of a recession in bond markets this month appeared “to want people to lose jobs” and “become not economically self-sufficient.”
“As an American,” Mr. Philipson said, “you should not want a recession, no matter your political views.”
Mr. Trump’s escalating trade war is the reason economists, traders and the American public are increasingly worried about the possibility of recession. As the president punishes China with higher tariffs — and Beijing retaliates — the fight is exacerbating a global growth slowdown while dragging on investment and business confidence in America.
ADVERTISEMENT
Investment has slowed this year, and actually contracted in the spring, and manufacturing output has slumped. Global growth is cooling, and the Federal Reserve has cut interest rates, partly out of concern over tariff-driven uncertainty. The overall growth rate has fallen, compared with last year.
Through all that, Americans have kept shopping, continuing to power economic growth. Consumer spending increased at an annualized rate of 4.7 percent in the spring, the Commerce Department said on Thursday, its fastest quarterly increase in nearly five years.
Unlock more free articles.
Create an account or log in
But one measure of consumer sentiment slipped by the most since 2012, data Friday showed, seemingly on tariff concerns: One in three respondents spontaneously mentioned the trade war.
Administration officials want to keep confidence high and are increasingly shifting blame for any slowdown on the media, Democrats and the Fed, which Mr. Trump has accused of putting the United States at a disadvantage to other countries by keeping interest rates too high.
ADVERTISEMENT
“The way the media reports the weather won’t impact whether the sun shines tomorrow,” Mr. Philipson said. “But the way the media reports on our economy weighs on consumer sentiment, which feeds into consumer purchases and investments.”
Mr. Trump himself has raised similar concerns but has dismissed any talk of recession as improbable given the “strong” economy.
Donald J. Trump
✔
@realDonaldTrump
The Fake News LameStream Media is doing everything possible the “create” a U.S. recession, even though the numbers & facts are working totally in the opposite direction. They would be willing to hurt many people, but that doesn’t matter to them. Our Economy is sooo strong, sorry!
64.5K
6:32 PM - Aug 21, 2019
Twitter Ads info and privacy
29.8K people are talking about this
On Friday, Mr. Trump continued his attack on the Fed as the main culprit in any slowdown, saying on Twitter, “The Euro is dropping against the Dollar ‘like crazy,’ giving them a big export and manufacturing advantage ... and the Fed does NOTHING!”
ADVERTISEMENT
He also rejected the idea that his tariffs are hurting American companies, saying any corporate pain is self-inflicted. “Badly run and weak companies are smartly blaming these small Tariffs instead of themselves for bad management ... and who can really blame them for doing that? Excuses!”
Even as signs of nervousness surface, official White House f
No comments