Economists React to Donald Trump's 'Massive Recession' Comments
— -- Some economists are pushing back against Donald Trump's comments that the U.S. is headed toward a "massive recession," calling the New York real estate developer's assertions "unfounded" and flat-out wrong.
Trump told The Washington Post over the weekend that the U.S. is headed for a "very massive recession," and he said the nation's unemployment situation is much worse than reported.
“First of all, we’re not at 5 percent unemployment. We’re at a number that’s probably into the twenties if you look at the real number,” he said. “That was a number that was devised, statistically devised to make politicians — and, in particular, presidents — look good. And I wouldn’t be getting the kind of massive crowds that I’m getting if the number was a real number.”
In La Crosse, Wisconsin, Trump doubled-down on his recession call, telling supporters today that "bubbles aren't pretty. We've had bubbles, and when they burst, it's not a good thing. And what I said is we're going to go into a massive recession, but I also say if I'm president that's not going to happen. Because I'm gonna straighten things out before it happens."
Harm Bandholz, chief U.S. economist at UniCredit Research in New York, told Reuters, "We're not heading for a recession, massive or minor, and the unemployment rate is not 20 percent."
Boston College economics professor Robert Murphy agrees. “Donald Trump’s comments that the U.S. economy is heading toward a deep recession in which the unemployment rate will reach 20 percent is completely unfounded,” he told ABC News.
AFL-CIO chief economist William E. Spriggs also disputed Trump's numbers.
“Though GDP growth is slowed, job growth has continued at a pace to close the job gap near January,” he told ABC News. “The broadest measure of unemployment, which includes discouraged workers and those who are part-time who wish full-time, is now in single digits. So, a claim of 20 percent unemployment is not true. It is that high for some groups, like black teenagers, but not for whole populations.”
On Friday, the Labor Department reported that the unemployment rate was 5 percent in March, relatively unchanged since August.
Murphy, who served in the Clinton administration as a senior economist at the Council of Economic Advisers, said the recent rebound in the stock market, positive news on consumer spending and continuing reports on employment growth suggest an economy sustaining a moderate pace of economic growth.
"Even with headwinds from China and Europe, the U.S. economy remains in good shape and likelihood of a recession in the next year is negligible," he said.
AFL-CIO chief economist William E. Spriggs also disputed Trump's numbers.
“Though GDP growth is slowed, job growth has continued at a pace to close the job gap near January,” he told ABC News. “The broadest measure of unemployment, which includes discouraged workers and those who are part-time and want full-time work, is now in single digits. So, a claim of 20 percent unemployment is not true. It is that high for some groups, like black teenagers, but not for whole populations.”
Trump also repeated his frustration with the “stupidity” of trade deals with the Post, and said he would negotiate "all of our deals, the big trade deals that we’re doing so badly on" if elected president.
