President Donald Trump’s economic adviser said American gross domestic product (GDP) may reach a growth rate of 4 percent or more.
“We are getting three and it may be a four for a quarter or two, it may be plus,” said Larry Kudlow, assistant to the president for economic policy and director of the National Economic Council, at CNBC’s 2018 Delivering Alpha Conference.
He said the average 2 percent growth the country had experienced with few deviations since it started to recover from the 2008 crisis up until the second quarter of 2017 could still be called a “growth recession” and that only after the economy starts to hit higher numbers could it truly usher in a prosperous era.
“You’ve got kids, millennials … who have never seen a full-fledged long-lasting prosperity,” Kudlow said. “It’s not that they’re cynics, they’ve just never seen it. We haven’t had one in 20 years.”
The economy was spurred by Trump’s regulation cuts and tax cuts and the expected GDP growth around 3 percent this year “may be the beginning of the recovery,” Kudlow said.
Kudlow noted the country still hasn’t experienced a capital investment boom since the recession before pointing to recently increased capital inflows.
“This is the hottest country right now in the world,” he said. “Trillions of dollars are coming here. It’s leaving Europe, it’s leaving China, it’s leaving a lot of places. We’ve never seen these kinds of inflows probably since the 1990s.”
He said the current positive indicators—including low unemployment, a red-hot jobs market, and business optimism—may be a prelude to even more Americans finding jobs and companies launching long-term investment projects.
“It is possible that the ‘real’ business growth cycle is right there in front of us for the next four, five, six years,” he said.
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