Trump reportedly thinks he can stave off a looming recession by telling voters the US economy is vibrant and booming

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Trump reportedly thinks he can stave off a looming recession by telling voters the US economy is vibrant and booming

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  • US President Donald Trump has publicly claimed that the US economy is strong, despite privately being told by officials that economic data indicated a possible downturn in the coming year, The Washington Post reported.
  • Despite being warned of a possible downturn, Trump believes that through positive messaging he can persuade Americans that the economy remains vibrant, therefore averting a recession.
  • Analysts believe that an economic downturn could seriously dent Trump's chances of reelection in 2020.
  • Visit Business Insider's homepage for more stories.

US President Donald Trump believes he can keep the economy afloat and avoid a severe downturn by undertaking an aggressive campaign of positive public messaging, despite aides warning him of a looming slowdown, The Washington Post reported Thursday.

Three people familiar with the matter told the publication that in early August the president was privately briefed by officials that data indicated the economy is likely to slow considerably over the next year, as he campaigns for reelection in November 2020.

But the president has in public statements claimed that the US economy is strong, and believes he can persuade Americans that it remains vibrant and unaffected by recent instability through a positive public messaging campaign. 

Read more: Trump's erratic outbursts show his fear that a recession could sink his reelection campaign, ex-White House officials say

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The Daily Beast reported earlier in August that three unnamed sources who have spoken to Trump about the economy since 2017 say he believe negative media reports can precipitate a recession, and tat this can be counterracted by positive messaging. 

"[Trump] thinks recessions or booms are often self-fulfilling prophecies," an unnamed source told the publication.

"He's said when the media starts beating the drum about a recession coming, that negativity gets into people's heads and they change their behavior: less purchasing, fewer entrepreneurs starting small businesses, people moving money out of the market, [and so on].

"That's why he's so concerned about the coverage of a potential recession … He believes he can will the economy in a positive direction by feeding optimism to the 'American spirit.'"

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The White House did not immediately respond to a request for comment on the Post's report. 

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Fluctuations last week in markets have prompted concerns that an economic slowdown or even recession may be approaching. Earlier in August, the yield curve in US Treasury bonds underwent an inversion, meaning that longer term borrowing became cheaper than short term borrowing.

Inversions of the yield curve are generally seen as a sign of a recession or economic slowdown in the near future.

 

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The White House's response to the possible downturn has been inconsistent, with officials reportedly reluctant last week to form plans to boost the economy should the situation worsen, fearing that doing so could fuel the fire of a downturn.

Read more: Experts say there is still a clear route for Trump to win reelection in 2020 even if a recession strikes

Soon afterwards, however, Trump announced that measures to boost the economy were being considered, among them possible pay roll tax cuts. 

The president's public statements have continued to be defiantly upbeat about the prospects for the economy, and he has blamed the media for exaggerating fears of a downturn as part of a plot to hasten a recession and end his presidency.

 

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Among the factors that economists have identified as being responsible for the global economic downturn are Trump's tariffs on Chinese goods, which the president has continued to defend. 

Trump said on Wednesday that even if America does fall into recession, it would be a price worth paying for confronting China over what Trump claims are its unfair trade practices.

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