A key economic adviser to President Donald Trump dismissed concerns about a looming recession on Monday, despite growing uncertainty over tariff policies and a slump in US stocks.
Kevin Hassett, head of the National Economic Council, told CNBC that while there may be short-term economic fluctuations, the long-term outlook remains strong.
His comments come as new data suggests American consumers are becoming more pessimistic about their financial future.
The stock market saw its worst day since 2022, which has led to recession fears in the US.
Tariffs Are ‘Bringing Jobs Back’
Hassett argued Trump’s tariffs on Canada, China, and Mexico were already having the desired effect—boosting US manufacturing and employment.
He said:
“There are a lot of reasons to be extremely bullish about the economy going forward.
“But for sure, this quarter, there are some blips in the data.”
He attributed the uncertainty to both the timing of Trump’s tariff strategy and what he called the “Biden inheritance.”
The Trump administration has frequently criticized the economic conditions it took over from President Joe Biden.
However, at the time Trump assumed office, GDP growth had exceeded trend for two years, consumer spending was strong, and unemployment remained near historic lows.
Consumers Show Growing Concern
Despite the White House’s optimism, economic indicators suggest a downturn.
The New York Federal Reserve’s latest Survey of Consumer Expectations revealed that households are increasingly worried about their financial prospects.
The report noted:
- Pessimism about personal finances rose in February.
- Expectations for higher unemployment reached their highest level since September 2023.
- Concerns about delinquency and access to credit increased significantly.
GDP Contraction Possible in Q1
Adding to the uncertainty, the Atlanta Federal Reserve’s GDPNow tracker predicts that the economy may shrink in the first quarter.
The expected decline is largely due to a significant drop in net trade.
Hassett downplayed these concerns, calling them a “very temporary phenomenon.”
He said historical trends show investment tends to slow after major elections but should recover by the end of March. He also predicted uncertainty around tariffs would clear up by April.
What’s Next for the US Economy?
While the White House remains confident in its economic strategy, market signals suggest growing instability.
If GDP does contract in the first quarter, it could reinforce concerns about a broader slowdown. Whether Trump’s tariffs will ultimately drive sustained job growth or further disrupt global trade remains to be seen.
