White House economist projects GDP growth could top 5% amid capital spending boom
One of Trump’s top economic advisers is predicting a boost in U.S. growth, saying the country could see GDP growth of more than 6 percent amid a boom in capital spending, especially if the conflict in Iran ends soon.
“I think we might actually be looking at numbers north of four, north of five, even north of six.” [percent]because there is so much capital stock growth right now,” National Economic Council Director Kevin Hassett “Sunday Morning Futures,” he said.
Detailing the acceleration in capital spending, Hassett noted that investment increased by 3.3% in March alone, not on an annual basis.
“When you multiply that by 12, you’re looking at historic capital spending numbers,” he added, arguing that the increase was driven by the Trump administration’s policies. tax policies and support efforts.
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He said the increase in investment laid the foundation for a sustainable period of strong economic growth as new factories and infrastructure come online.
“The 2% figure you see GDP growth“The reason it was 2 percent and not 4 or 5 percent was because we were importing a record number of capital goods because we were building all these factories,” he said.
“When we open these factories, you’ll see growth we’ve never seen before.”
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Hassett also noted the growth rate of the capital stock.
“It’s like how we make things with so much stuff,” he explained.
“Right now it’s between 5 and 8 percent. If you divide that by three, it’s about the amount of GDP growth you get from capital spending alone.”
Hassett also discussed the potential for: natural gas prices will fall It indicates that supply will increase in the near future as oil shipments begin to pass more easily through the Strait of Hormuz.
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“This will help bring prices down relatively quickly,” he said.
“Now, there’s a little bit of a time lag from that. We have to move the boats from the Persian Gulf, especially to Asia, where jet fuel prices are very high, and that could take a month or two, but once, basically, the gush opens, then we expect: Oil prices may fall relatively “Quickly and definitely before the election.”
Original article source: White House economists predict GDP growth could exceed 5% amid boom in capital spending
