National Economic Council (NEC) Director Kevin Hassett on Monday brushed aside recent polling on the economy, insisting the nation is “in a boom.”
Appearing on CNBC’s “Squawk Box,” Hassett pointed to consumer spending as proof the economy remains on solid footing.
“If economic polls … were correct, then people wouldn’t be taking trips to nice hotels, they wouldn’t be flying, they wouldn’t be buying cars, they wouldn’t be doing all the things they do when they’re feeling good about the economy,” Hassett told host Joe Kernen.
Consumer spending rose by $190.7 billion from July to August. That figure accounted for the annual inflation rate of 3.4 percent, as measured by the personal consumption expenditures price index.
Hassett argued that the “true sentiment” of the economy is “best measured by what you see” Americans doing.
“And what people are doing is they’re acting like we’re in a boom. And the reason they’re doing that is because despite what the polls say, we are in a boom,” he told Kernen.
CONSUMER CONFIDENCE SLIDES
Hassett’s upbeat assessment comes as surveys paint a less rosy picture.
According to the Conference Board, consumer confidence fell in September to its lowest level since 2014.
The University of Michigan’s Surveys of Consumers index also preliminarily reported a consumer confidence reading of 46.3 in October. That marks a 13.6 percent drop compared to the same time last year. Final data for the month is set to be released Friday.
INFLATION REMAINS ABOVE TARGET
The unemployment rate remains below 5 percent. However, inflation continues to run above the Federal Reserve’s 2 percent target.
According to the consumer price index, annual inflation hit 3.7 percent in September, up from 3.4 percent in August.
Stubborn inflation pushed Federal Reserve officials to raise interest rates last month, the first hike since the summer of 2023.
Traders are pricing in roughly an 83 percent chance that the central bank will hold rates steady at its meeting next week, according to the CME FedWatch tool.
Borrowing costs for homebuyers are also elevated. The average 30-year mortgage rate stands at 7.4 percent, a nearly four-year high, according to Freddie Mac.
HASSETT ECHOES TRUMP
Despite those headwinds, Hassett echoed President Trump’s positive view of the economy, saying Monday the country is in good shape as early voting in the midterms gets underway.
“If you look at, holistically, where the economy is, we’ve got high growth, we’ve got the lowest unemployment insurance claims since World War II,” Hassett told Kernen.
He argued that September’s uptick in inflation is “hardly enough to overpower all the good news” for the economy.
The NEC director’s comments set up a clear contrast between the administration’s message and what Americans are telling pollsters. While surveys show confidence sinking to multi-year lows, Hassett maintained that spending habits reveal a stronger economy than the polls suggest.
As voters head to the polls in the midterms, Hassett made the case that consumer behavior, not survey results, tells the real story of where the economy stands.
