White House economic adviser Larry Kudlow says recent indicators for the U.S. economy show that America is the "hottest economy" in the world.
The veteran financial guru and former Ronald Reagan adviser also predicted the next monthly unemployment report could shock naysayers.
Kudlow said the economy will snap back from any "glitch" created by partial government shutdown.
“We're the hottest economy in the world. Nothing has changed,” Kudlow told Fox Business Network when asked how the government shutdown could hurt economic growth.
Kudlow, assistant to the president for economic policy and director of the White House’s National Economic Council, pointed to a litany of strong economic data. Among them, filings for U.S. unemployment benefits fell last week to the lowest level since 1969, signaling the labor market remains tight despite the partial federal-government shutdown, Bloomberg reported.
Jobless claims declined 13,000 to 199,000 in the week ended Jan. 19, bucking economist forecasts for an increase, Labor Department figures showed Thursday. The four-week average, a less-volatile measure, decreased to 215,000, the lowest since early November.
The jobless-claims drop likely signals another blowout month for the next monthly unemployment report despite the prolonged government shutdown, Kudlow said.
“It suggests very strongly that the jobs report for January will be up,” Kudlow told FBN. “And it may be up a significant amount,” he predicted.
To be sure, job creation ended 2018 on a powerful note, with nonfarm payrolls surging by 312,000.
“We're the hottest economy in the world. Trillions of dollars are flowing here and building new plants and equipment," said Kudlow, who served as the Trump campaign's senior economic adviser.
“Almost every other data point suggests, that the economy is very strong. We will beat 3% economic growth in the fourth quarter when the Commerce Department reopens," Kudlow said.
"We are seeing very strong chain sales. We don't get the retail sales report right now and we see very strong manufacturing production," he said.
"And in particular, this is my favorite with our corporate tax cuts and deregulation, we're seeing a seven-month run-up of the production of business equipment, which is, you know, one way of saying business investment, which is another way of saying the kind of competitive business boom we expected to happen is happening," he said.
To be sure, Reuters reported that labor market conditions remain strong, which for now should help to temper fears of a sharp slowdown in economic growth. Other data on Thursday showed a gauge of future U.S. economic activity fell in December.
“I can only give you numbers like this. These are facts. They're all pointing in the direction of a continued strong American economy,” said Kudlow, who worked as Reagan’s budget deputy between 1981 and 1985.
The economy is facing several headwinds, including a bitter U.S. trade dispute with China and a month-long partial shutdown of the federal government, which are hurting consumer and business confidence. Higher interest rates, fading fiscal stimulus and cooling global economies are also seen crimping domestic growth.
“If you’re looking for good news on the economy, look no further than the labor market,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors in Kalamazoo, Michigan. “Growth may be slowing, but the overall picture for workers and those seeking work remains quite positive.”
Material from Bloomberg and Reuters has been used in this report.
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