Donald Trump's prediction that the U.S. economy was on the verge of a
"very massive recession" hit a wall of skepticism on Sunday from
economists who questioned the Republican presidential front-runner's
calculations.
In an interview with the Washington
Post published on Saturday, the billionaire businessman said a combination of
high unemployment and an overvalued stock market had set the stage for another
economic slump. He put real unemployment above 20 percent.
"We're not heading for a
recession, massive or minor, and the unemployment rate is not 20 percent,"
said Harm Bandholz, chief U.S. economist at UniCredit Research in New York.
The official unemployment rate has
declined to 5 percent from a peak of 10 percent in October 2009, according to
government statistics. But a different, broader measure of unemployment that
includes people who want to work but have given up searching and those working
part-time because they cannot find full-time employment is at 9.8 percent.
Coming off a difficult week of
campaigning, in which he acknowledged he struggled to articulate his position
on abortion among other missteps, Trump's comments to the Post might be some of
his most bearish on the economy and financial markets.
"I think we're sitting on an
economic bubble. A financial bubble," he said.
Some economists agree the stock
market is in a period of overvaluation but do not see that as foretelling a
cataclysmic economic downturn originating in the United States.
"Nobody can predict what the
stock market is going to do," said Rajeev Dhawan, director of the Economic
Forecasting Center at Georgia State University. "I cannot predict a stock
market crash, so I cannot predict a recession. I don't see any of the reasons
for a recession going forward unless there is a huge problem with the market or
there is some catastrophic world event which is beyond the scope of
economics."
Sung Won Sohn, an economics professor
at California State University Channel Islands in Camarillo, put the probability
of an imminent recession at less than 10 percent. "If it happens, it would
be because of what is happening overseas, especially in China and Europe,"
he said.
'U.S. STILL SOLID ENOUGH'
Joel Naroff, chief economist at
Naroff Economic Advisors in Pennsylvania, said it would take a "total
financial meltdown" to trigger a recession.
"We can get by with Europe
growing minimally," he said. "We can get by with China growing
modestly because the rest of the U.S. is still solid enough that we can handle
weakness in the rest of the world."
The Democratic National Committee
criticized Trump for his remarks, saying they "undermine our
economy."
Trump's success with voters, despite
his sometimes saying things only to contradict them later, has also alarmed
many leading figures within his own party. Some of them are openly plotting to
try to prevent him from becoming the nominee at the party's national convention
in July.
Reince Priebus, the Republican
National Committee chairman, said on Sunday that voters were "afraid"
of their economic situation, when asked about Trump's remarks on CNN's
"State of the Union" show.
"When people are afraid and when
they're angry, sometimes people say things that they regret," he said,
apparently referring to Trump's remarks.
He also played down speculation that
party leaders would seek to dislodge Trump by helping someone who is not even a
declared candidate prevail at the convention, which becomes governed by
complicated voting rules if no candidate arrives with a clear majority.
"I think that our candidate is
someone who's running," Priebus said, referring to Trump, U.S. Senator Ted
Cruz of Texas and Ohio Governor John Kasich. The candidates will next face
voters on Tuesday in Wisconsin, where recent polls show Cruz holding a small lead
over Trump.
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