Kevin Hassett, a White House economic adviser, expressed optimism about the U.S. economy on Monday, predicting that the first quarter GDP data would just barely remain positive. In an interview with CNBC, Hassett highlighted the potential resolution of uncertainties surrounding President Trump’s trade policies next month as a catalyst for economic optimism. Despite some economists anticipating a negative GDP result for the first quarter, Hassett maintained that there are several compelling reasons for a positive outlook.
He pointed to the positive impact of Trump’s tariffs on Canada, China, and Mexico, which have started to encourage the return of manufacturing jobs to the U.S. He acknowledged some inconsistencies in the data for this quarter, attributing them both to the effects of the previous administration and to timing issues related to the tariffs. Hassett referenced predictions from the Atlanta Federal Reserve indicating potential negative GDP growth but characterized this as a temporary situation.
He suggested that a historical trend where investments pause after significant elections contributed to this forecast and is expected to resolve in the coming weeks. Recent Reuters polls reflect growing concerns among economists regarding the challenges posed by Trump’s tariffs, with many indicating an increased risk of recession across the North American economies. He noted that Trump’s 20% tariffs on Chinese imports and 25% on those from Canada and Mexico have created significant uncertainty among businesses.
Despite these challenges, Hassett remained hopeful, arguing that the recent U.S. tax cuts would stimulate investment and increase real wages by the second quarter. He cautioned against overemphasizing discussions about a recession, suggesting instead that the economy would show resilience and growth following the initial quarter.