Trump: ‘Mistake’ Democrats didn’t want a payroll tax cut
President Trump says he wanted a payroll tax cut but the Democrats didn’t want it.
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President Trump on Tuesday said he expects U.S. economic growth to rebound from the coronavirus pandemic in the fourth quarter of the year as the nation faces its first downturn in nearly six years.
“I think the fourth quarter is going to be really strong, and I think next year is going to be a tremendous year,” Trump said during a White House meeting with Florida Gov. Ron DeSantis. “That’s what’s building. Third quarter is a transition quarter. Second quarter is what it is.”
Trump's comments come one day before the release of the first-quarter gross domestic product on Wednesday, which is expected to reveal the economy contracted at a 4 percent annualized rate in the first three months of the year, according to Refintiv economists, well before a broad swath of the country shut down to mitigate the spread of the virus.
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It would be the first quarterly contraction since the first three months of 2014, and the worst since the Great Recession more than a decade ago. Estimates vary drastically for how much the economy will shrink during the second quarter, with Goldman Sachs forecasting a 34 percent contraction.
Larry Kudlow, Trump's chief economic adviser, said the administration is aware that "we're in a deep contraction with rising unemployment."
More than 26 million Americans, or about 16 percent of the nation, have filed unemployment claims since the virus outbreak forced a broad swath of the U.S. economy to shut down.
But Kudlow said the four stimulus packages, including the massive $2 trillion bill signed into law at the end of March, passed by the federal government will help to cushion the economic blow from the mandated stay-at-home orders throughout the nation.
"We'll take that hit," he said. "It's very bad, very difficult. We're doing what we can."
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Still, Kudlow said there's a lot of "pent-up" demand.
"I'm optimistic about the future," he said.
The Trump administration is not alone in its expectations for a solid economic rebound from the crisis. Earlier in the month, Federal Reserve Chairman Jerome Powell said he thinks there can be a "robust" economic rebound from the pandemic, even as increasingly strict containment measures force American life to come to a grinding halt.
“At the Fed, we are doing all we can to help shepherd the economy through this difficult time,” Powell said. “When the spread of the virus is under control, businesses will reopen, and people will come back to work. There is every reason to believe that the economic rebound, when it comes, can be robust.”
The Commerce Department is set to release the first-quarter gross GDP report on Wednesday at 8:30 am ET.
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