Top Trump economic adviser Kevin Hassett said that Friday’s jobs report indicates higher risks to the economy but that he remains hopeful job growth will pick up in June and the U.S. will avoid a recession.
Hassett, the outgoing chairman of the White House Council of Economic Advisers, acknowledged that the estimated 75,000 jobs created during May were disappointing and could indicate a slowing in job creation and the overall economy. But he also cited the fact that bad weather may have temporarily hurt employment as a reason to remain optimistic, and he pointed out that job growth bounced back from another disappointing jobs report this year.
“I think that the number was a little below expectation. I think half the story was weather-related because of floods in the Midwest,” said Hassett, who also noted the high number of tornadoes that struck in the U.S. in May. “Either it’s slightly downshifting to a pace of 150,000 [jobs added a month], or it’s weather-related, and we’ll find out next month.”
“All that stuff should start to work itself out in June,” Hassett added.
Friday’s jobs report was a major miss, showing about 100,000 fewer new jobs than expected. The Bureau of Labor Statistics also revised down its job estimates for March and April by 75,000 in aggregate.
Hassett said the figures, along with other recent data, including Friday’s job figures, could mean economic growth slows from the nearly 3% annual rate achieved in 2018 and set as a goal for every year of the Trump administration.
“We are at the point where the risks to the outlook are a little bit higher than they were three or four months ago,” Hassett said.
Hassett, though, downplayed fears that lower Treasury interest rates are signaling an oncoming recession. He argued they are not as accurate at predicting recessions as they used to be.
“Financial markets are impacted by the extraordinary monetary policies of other countries too,” said Hassett. He said the Treasury bond “yield curve” may not be as reliable now as it was when the market had fewer international investors.
Hassett also pointed to still-strong manufacturing figures and a 3.1% increase in wages over the past year as signs that the economy will continue to be healthy.
“My expectation is that we’ll see a bounce back next month,” said Hassett, who plans to leave the White House at the end of June.
