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Trump's economic adviser scrambles to play down growing fears of looming recession

But Larry Kudlow also played down fears of a recession in 2007, just months before the worst financial crash since the Great Depression

David Maclean
New York
Sunday 18 August 2019 17:55 BST
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(Getty Images)

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Donald Trump’s top economic adviser is scrambling to play down fears of a looming recession - after financial markets dropped sharply last week.

Larry Kudlow predicted the economy will perform well in the second half of 2019, and said consumers are seeing higher wages so they can spend and save more.

“No, I don’t see a recession,” he said in a Sunday television interview. “We’re doing pretty darn well in my judgment. Let’s not be afraid of optimism.”

However, he also played down fears of a recession in 2007 - just months before the worst financial crash since the Great Depression.

Mr Kudlow acknowledged during this weekend’s interviews that the energy sector is slowing, but said low interest rates will help housing, construction, and car sales.

A strong economy is key to an incumbent president’s prospects going into an election year - but consumer confidence has dropped more than six per cent since July.

Mr Trump has been talking up the economy via Twitter as he spent most of the week at his golf club in New Jersey.

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Kudlow also defended the president’s tariffs on goods coming from China - despite his known opposition to them before joining Mr Trump’s administration.

He said Mr Trump has taught him and others that the “China story has to be changed and reformed” adding that the US “cannot let China pursue these unfair and unreciprocal trading practices."

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