Yesterday WDTLAY posted about Trump’s farcical promise to eliminate the national debt in his eight years as President. In that same interview in the Washington Post he predicted a “very massive recession.”

He cited high unemployment and an overvalued stock market as a “financial bubble,” with a serious recession looming. “First of all, we’re not at 5 percent unemployment. We’re at a number that’s probably into the twenties if you look at the real number,” he said in regard to the unemployment rate of 5% released by Bureau of Labor Statistics. A broader measure of unemployment that includes part time employees and those that have become discouraged and stopped looking for work is pegged at 9.8%.

The above graph, from the Bureau of Labor Statistics, shows that unemployment is approaching its pre-recession lows of 4.4%, though currently at 5%.

In an article at Huffington Post, Harm Bandholz, chief U.S. economist at UniCredit Research, said “We’re not heading for a recession, massive or minor, and the unemployment rate is not 20 percent.”

Many economists would agreed that the stock market may be in a period of slight overvaluation due to the recent rally. The market as a whole has been estimated to be 15% higher than its long term averages, but hardly a catastrophic overvaluation that Trump’s hyperbolic statements would suggest.

In an article at CNBC, Rajeen Dhawan, director of Economic Forecasting Center at Georgia State University, said “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.”

Sources:
https://www.washingtonpost.com/politics/in-turmoil-or-triumph-donald-trump-stands-alone/2016/04/02/8c0619b6-f8d6-11e5-a3ce-f06b5ba21f33_story.html
http://data.bls.gov/timeseries/LNS14000000
http://www.cnbc.com/2016/04/03/trump-predicts-massive-recession-but-economists-say-hes-wrong.html
http://www.huffingtonpost.com/entry/donald-trump-economists_us_5701b1c9e4b0a06d5805ff8e?utm_hp_ref=donald-trump