White House economist: 'At least 50-50' odds GDP tops 4% for second quarter in a row
White House economist Kevin Hassett on Friday gave favorable odds that U.S. economic growth will surpass 4 percent for a second consecutive quarter.
Hassett, chairman of the Council of Economic Advisers, told Fox News that third-quarter growth in gross domestic product (GDP) is “looking pretty close” to the 4.2 percent increase posted in the second quarter, “so it’s not just a blip.”
“It’s at least 50-50 that it’s above 4 percent now,” he said during an interview with Sandra Smith on Fox News’ “America’s Newsroom.”
GDP grew at its fastest pace in nearly four years last quarter, while an estimate for first-quarter growth was revised upward to 2.2 percent from 2 percent, according to the Commerce Department. The second quarter benefited from stronger consumer and business spending, as well as an increase in exports that occurred in advance of expected tariffs from China.
The third and final read on second-quarter GDP is due Thursday. Economists expect to see 4.2 percent growth, according to Thomson Reuters.
Some economists have questioned whether the U.S. economy can maintain robust growth of around 4 percent, while Larry Kudlow, President Donald Trump’s chief economic adviser, has said the second quarter’s growth rate will be sustainable. The Trump administration has credited tax and regulatory cuts for spurring economic growth.
Hassett noted that U.S. factories are “buying machines like hot cakes,” which contributed to growth in the second quarter. He added that new factories will continue to drive economic growth going into 2019 when they begin producing output.
“This is exactly the kind of sustainable growth that economists would love to see,” he said. “Even though the growth rate isn’t the highest you’ve ever seen, I really feel comfortable saying that except for the dot-com boom of the late ‘90s, this is about the best economy I’ve seen in my lifetime.”
Hassett also estimated that real wages will advance 2.5 percent over the next 12 months, up from 1.4 percent.
When asked about trade negotiations with Canada, Hassett said the U.S. is getting “very, very close to the deadline where we’re going to have to move ahead with Mexico all by themselves.”
“I worry that politics in Canada is trumping common sense because there’s a very good deal that was designed by Mexico and the U.S. to appeal to Canada,” he said. “They’re not signing up, and it’s got everybody over here a little bit puzzled.”