White House economic adviser Larry Kudlow contends that the 2017 Trump administration tax cuts are still working to boost the economy and fuel economic growth.
“I think the tax cuts are working. I think nominal GDP is much higher than people expected,” the veteran financial guru and former Ronald Reagan adviser said on CNBC.
“We're in a good spot here, if you ask me. I hear all this pessimism coming off Wall Street. OK, I understand corrections. Look, we're getting tremendous increases in growth. We're running 3% year-on-year. Nobody thought that would be possible and we're there,” said Kudlow, who served as the Trump campaign's senior economic adviser.
“I think for all of President Trump's quarters, except the very first quarter when he just came into office, I think the growth rate has been 3.1% at an annual rate for something like seven quarters,” said Kudlow, who worked as Reagan’s budget deputy between 1981 and 1985.
Late last month, the government said the U.S. economy slowed in the third quarter as previously reported, but the pace was likely strong enough to keep growth on track to hit the Trump administration’s 3 percent target this year, even as momentum appears to have moderated further early in the fourth quarter.
Gross domestic product increased at a 3.5 percent annualized rate, the Commerce Department said in its second estimate of third-quarter GDP growth. That was unchanged from its estimate in October and well above the economy’s growth potential, which economists estimate to be about 2 percent.
Just after Kudlow spoke, the Atlanta Federal Reserve’s GDPNow forecast model showed that the U.S. economy is expanding at a 2.4 percent annualized rate in the fourth quarter as data showed domestic payrolls growth slowed in November, Reuters reported.
This was slower than the 2.7 percent pace for fourth-quarter gross domestic product that the Atlanta Fed’s GDP program calculated on Thursday.
The Atlanta Fed projection came after
U.S. job growth slowed in November and monthly wages increased less than expected, suggesting some moderation in economic activity that could support expectations of fewer interest rate increases from the Federal Reserve in 2019, the Associated Press reported.
The Labor Department’s closely watched monthly employment report on Friday came against a backdrop of a steep sell-off on Wall Street and a partial inversion of the U.S. yield curve, which have stoked fears of a recession.
Meanwhile, Kudlow sees healthy economic growth continuing into the future.
“I think you'll see bigger increases in revenues,” said Kudlow, the head of the National Economic Council that advises Trump.
“The supply side tax cuts and the rollback of regulations and opening of energy and so forth, we're producing very significant growth with virtually no inflation,” he said.
“Inflation is coming in under the Fed's target that may be cause for their reassessment. I think it's a good position to be in.”
Meanwhile, the U.S. economy is expanding at a 2.4 percent annualized rate in the fourth quarter as data showed domestic payrolls growth slowed in November,
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