White House insists fundamentals of US economy 'very strong'

WASHINGTON (AP) — The "fundamentals" of the U.S. economy are solid, the White House asserted, invoking an ill-fated political declaration of a decade ago amid mounting concern that a recession could imperil President Donald Trump's reelection.

Exhibiting no such concern, senior adviser Kellyanne Conway declared to reporters on Monday, "The fact is, the fundamentals of our economy are very strong."

It's a phrase with a history. Republican John McCain was accused of being out of touch when he made a similar declaration during the 2008 presidential campaign just hours before investment bank Lehman Brothers filed for bankruptcy, setting off a stock market crash and global financial decline.

A case can be made for the White House position. The U.S. job market is setting records for low unemployment, and the economy has continued uninterrupted growth since Trump took office.

But growth is slowing, stock markets have swung wildly in recent weeks on recession fears, and indicators in the housing and manufacturing sectors have given economists pause. A new survey Monday showed a big majority of economists expecting a downturn to hit by 2021 at the latest, according to a report from the National Association of Business Economics.

Trump begs to disagree.

"We're doing tremendously well. Our consumers are rich. I gave a tremendous tax cut and they're loaded up with money," Trump said on Sunday. "I don't think we're having a recession."

Still, the Republican president took to Twitter on Monday to urge the Federal Reserve to stimulate the economy by cutting interest rates and returning to "quantitative easing" of its monetary policy, an indication of deep anxiety beneath his administration's bravado. And he backtracked last week on taking the next step in escalating in his trade war with China, concerned that new tariffs on consumer goods could hamper the critical holiday shopping season.

White House aides and campaign advisers have been monitoring the recent turbulence in the financial markets and troubling indicators at home and around the world with concern for Trump's 2020 chances.

Any administration has to walk a fine line between reflecting the realities of the global financial situation and adopting its historical role as a cheerleader for the American economy. For Trump, striking that balance may be even more difficult than for most.