Washington (AFP) – There are currently no signs that the United States has entered a recession despite the world’s largest economy recording a contraction in the first quarter, the US Treasury Secretary said Tuesday.
“I believe in data, and there is nothing in the data that shows that we are in a recession,” Scott Bessent told lawmakers during an appearance in Congress. Bessent’s remarks contrast with those of Trump, who was asked in a recent interview if the United States could enter a recession. “Anything can happen,” he told NBC in the interview, which was broadcast on Sunday. “But I think we’re going to have the greatest economy in the history of our country. I think we’re going to have the greatest economic boom in history.”
The technical definition of a recession is two consecutive quarters of economic contraction, although the National Bureau of Economic Research uses a slightly broader metric when making official judgements about the US economy. “As a matter of fact, the jobs report had a surprise to the upside,” Bessent said, referring to the better-than-expected April jobs report published last week.
Since taking office, US President Donald Trump has rolled out steep tariffs against top trading partners, leading to a surge in volatility in the financial markets and causing analysts to predict higher inflation and slower growth this year. Growth in the first quarter of 2025 unexpectedly contracted, according to initial government estimates, as consumers and businesses rushed to import more goods ahead of the rollout of Trump’s sweeping “liberation day” tariffs in early April.
Bessent told lawmakers the administration was making good progress with top trading partners ahead of a self-imposed July deadline to reach a deal or face the prospect of higher tariffs — with the exception of China, with which the United States has not yet begun talks. “Perhaps as early as this week we will be announcing trade deals with some of our largest trading partners,” he said, echoing recent remarks from the US president.
“And what I will tell you is that in negotiating with some of them, they may not like the tariff wall that President Trump has put up, but they have them,” he added. “So if tariffs are so bad, why do they like them?”
Once the negotiations conclude, Bessent said he expects the United States would “see a substantial reduction in the tariffs that we are being charged, as well as non-tariff barriers, currency manipulation, and the subsidies of both labor and capital investment.”
© 2024 AFP
