Peter Navarro likes to talk about lists.
In 2019 as the China trade talks often oscillated between confidence and moments of pessimism, the senior Trump advisor often talked about China’s ‘7 deadly sins’ including cyberattacks, forced technology transfer, intellectual property theft, product dumping, subsidized state-owned enterprises, currency manipulation, and selling fentanyl to the U.S.
“We need to go back to that original deal, those seven verticals, dealing completely with all of those structural issues,” Navarro said on Yahoo Finance in September.
It’s a new year and there’s a new list: “If I look ahead, I'm just going to give you positive news,” he said during an appearance on Yahoo Finance’s The Final Round Friday. “I look at what I call the 4 drivers of the GDP equation: consumption, investment, government spending and net exports.”
“If you look at each one of those, there's very good news in all of them,” he said. “I think 2020 is going to be a very boom year, a bullish year. So, let's see what happens.”
The tone was emblematic of the White House mood as a range of long-sought economic initiatives are at or near the finish line and some economic indicators remain stable. The ‘phase 1’ trade deal with China is set to be signed on Wednesday. The USMCA trade agreement with Mexico and Canada is nearing final Congressional approval.
Yet there are plenty of reasons for concern. The U.S. labor market produced fewer than expected jobs in December amid decelerating wage growth. The joblessness rate, however, held at a 50-year low and the U-6 unemployment rate — the broadest measure that includes discouraged workers and part-time workers seeking full-time employment — fell to 6.7% which is the lowest level on record.
2019 also ended with CEOs growing less optimistic about the U.S. economy for the seventh straight quarter. The Business Roundtable quarterly CEO Economic Outlook survey for the fourth quarter found the nations business leaders expecting “continued moderation in the pace of economic growth.”
But Navarro, the Director of the Office of Trade and Manufacturing Policy, wasn’t interested in hearing about any storm clouds. “There wasn't anything I didn't like about this particular report today” he said of the jobs numbers.
And he really didn’t want to hear about ongoing trade concerns.
“You folks are insatiable,” he responded when asked about the challenges for a ‘phase 2’ deal by Yahoo Finance’s Myles Udland. “Wednesday, we're going to sign phase one, let's let the news cycle digest that...Then I'll come back on next week, we'll talk phase two: how's that for a deal?”
The phase two negotiations, when they happen, will involve a range of more difficult issues between the two countries, including many of the Chinese ‘sins’ previously cited by Navarro that are expected to remain unresolved in phase 1.
On the question of GDP growth in 2020, Navarro repeated his prediction that the US should expect growth that is closer to 3% growth in 2020 vs 2%.
Other entities are expecting a much lower result. For example, Fannie Mae recently predicted 2020 U.S. economic growth at a slower, but still respectable, rate of 1.9%. The Federal Reserve Bank of Chicago also forecast 1.9% growth in 2020.
Navarro even discussed what might get the US economy even higher.
“If you get a continued improvement in the trade deficits, that would be the most likely place where you could get above” 3% growth he said before stopping short of predicting that outcome.
“Two and a half is a very good number,” he said.
Ben Werschkul is a producer for Yahoo Finance in Washington, DC.