White House Says Economy Is Solid Even as First Quarter Looks Weak

© Bloomberg. Kevin Hassett, chairman of the White House Council of Economic Advisers, speaks during a Bloomberg Television interview outside the White House in Washington, D.C., U.S.

(Bloomberg) — The U.S. economy is on track to grow 3 percent or faster this year despite an admittedly lackluster start to 2019, the White House’s chief economist said Tuesday.

“The state of the economy is strong,” Council of Economic Advisers Chairman Kevin Hassett said on Bloomberg Television, before adding that “data for the first quarter is looking pretty weak.”

According to the Federal Reserve Bank of Atlanta’s GDPNow tracking forecast, the economy will expand at just a 0.4 percent annual rate in the three months through March. That could put President Donald Trump behind the curve on his pledge to deliver annual growth of 3 percent or higher.

But Hassett said the administration is confident it will deliver in 2019 and beyond after 3.1 percent growth in 2018. He blamed the soft start of the year to “residual seasonality,” a data phenomenon typically associated with weakness in first-quarter gross domestic product.

“The quarter keeps being weak year after year after year. I think a typical first quarter now is 1 percent and a typical second quarter is about 3 percent, and we’re looking for that pattern to be in the data as well,” Hassett said in the interview with anchor David Westin.

This is “something that economists call residual seasonality and, oh gosh, a hundred people just turned the TV off” because the interview entered into wonkish territory, Hassett joked.

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