Joe Gilbertson | Jun 20, 2022 | 12
White House Economic Adviser Says There is “No Recession in Sight”
On Friday, Larry Kudlow, White House economic adviser said that the economy will continue to boom despite the recent sluggish movement of the stock market.
“We have strong growth, strong jobs and no inflation. That is a terrific optimal situation for our country or any country to be in and I hope the Central Banks take note of this” said Kudlow to Varney & Co. “It doesn’t get any better than this and I would encourage people to reconsider their pessimism.”
According to the December jobs report, 312,000 new jobs were added, which is much more than anticipated.
The Labor Department reported on Friday that the unemployment rate increased to 3.9 percent and that the average hourly pay improved by 3.2 percent. This is more than the 2.7 percent increase from the year prior.
In 2018, employers added 2.6 million jobs total, averaging 217,000 jobs a month.
Kudlow pointed out that this means that the gross domestic product (GDP), which spiked 2.6 percent in the fourth quarter, will likely increase even more.
“And I say no. There is no recession coming. There is no recession in sight,” said Kudlow.
However, some economists think that hiring will eventually slow down.
“The labor market is very strong even though the economy appears to be slowing,” said Eric Winograd, senior U.S. economist at the investment management firm Alliance Bernstein. “Those two things cannot coexist for very long. Either weakening demand will lead firms to dial back the pace of hiring or the robust pace of hiring will lead firms to ramp back up production.”
Martha Gimbel, director of economic research at the jobs site Indeed expressed similar concerns.
“People should not get used to numbers like the one we saw this month,” said Gimbel. “Eventually, job growth is going to start slowing down. When that happens, we shouldn’t panic.”
But the labor force participation rate increased to 63.1% in December, a slight improvement from the already high 62.9% in November. The labor participation rate for prime working-age persons from the age of 25-54 spiked to 82.3% in December.
The labor force participation was especially low during the Obama-era and recession.
A tight labor market is a good thing for job seekers, many of which have now new opportunities. The overall labor participation rate is gradually climbing, which means more people are rejoining the workforce.
Kudlow also addressed concerns about the “trade war” with China and the impact of the recent trade negotiations on U.S. companies.
“It’s a little easy and inaccurate to say all of these American companies are going to crash,” said Kudlow to Bloomberg.
Author’s note: Although the stock market has dipped, the labor market is still booming. The labor force participation rate, which sank dramatically under Obama, appears to be poised to recover.