Today’s payrolls report absolutely crushed expectations and indicated that, contrary to fears that the trade war and government shutdown might have hurt hiring in December, the US labor market expanded at its strongest pace since February 2018 and broke above 150 million jobs for the first time ever.
So it’s hardly surprising that the White House is touting the data as a major source of vindication.
President Trump chimed in on twitter after data to tout its strength, marking his first comment on economic data in months.
GREAT JOBS NUMBERS JUST ANNOUNCED!
— Donald J. Trump (@realDonaldTrump) January 4, 2019
Meanwhile, White House economic advisors Larry Kudlow took to Bloomberg TV to declare that despite the recent volatility in stocks, the jobs data suggest “there is no recession in sight.”
“There’s no recession in sight…I know this has been a gloomy period and I know people are concerned about the stock market,” Kudlow said.
The December jobs report showed the economy added 312,000 jobs last month, far more than the 177,000 that were expected.
“The American economy is growing 3 percent, job gains are huge and businesses are investing big time,” Kudlow said. “It’s a much better optimistic picture than what we’ve been getting in the last month or two.”
Kudlow also criticized the Philips Curve – the Fed’s go-to inflation model – arguing that “more growth, more people working does not cause inflation” (since the financial crisis, the relationship between employment and inflation has apparently broken down).
And he also appeared to walk back Kevin Hassett’s comments from yesterday claiming that the trade war with China might crash US profits, and that more pain could lie in wait for “a heck of a lot” of US companies.
Instead, he argued that a trade truce could conversely help save the Chinese economy.
“China needs the kind of pro-growth trade reforms that President Trump is suggesting…we can help their economy if they let us.”
And while Apple’s warning about declining sales in China sent stocks reeling yesterday, Kudlow said IP theft could be a bigger problem for the US consumer tech giant.
The administration is “optimistic” about the preliminary talks with China, and that the two sides would meet to discuss the possibility of China cutting its subsidies to state-backed enterprises.
Watch a clip from the Kudlow interview below:
“There is no recession in sight,” says White House’s Larry Kudlow after strong jobs report https://t.co/eyw5tZ5wmI pic.twitter.com/4T4rlfKM7X
— Bloomberg Economics (@economics) January 4, 2019
While traders celebrated the jobs number by sending stocks higher, one twitter user pointed out, Kudlow’s comments could be a counter-indicator suggesting that a recession might be looming just around the corner.
The fact Kudlow is wrong nearly 100% of the time, the chances of a recession just went up.
— Ryan Hansen (@hansenry) January 4, 2019
Stocks seem happy with the news – Dow is up 500 points, extending gains on Kudlow’s reassuring words…
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