MNI INTERVIEW: US Growth, Jobs Poised For Rebound - Miran 

The U.S. economy and job market are set for a bounceback in coming months as fading uncertainty surrounding trade and tax policies leads to renewed investment and hiring, Stephen Miran, chair of the White House Council of Economic Advisers, told MNI Tuesday. 

Recent downward revisions to payroll employment data were a disappointing sign that job growth had slowed more sharply in the first few months of the year than previously believed, but that's set to reverse, Miran said. 

“I do think the labor market in the first half of the year was weaker than we thought it was, and it was weaker than I would like it to have been, but I do think there are material tailwinds to growth now that obviate a lot of those concerns,” he said in an interview in his office.

Now that a number of key trade deals have been struck and the administration’s signature tax legislation has been made into law, hiring could pick up again, he said. 

“Not only has that uncertainty been resolved, it has also turned into a tailwind,” said Miran. “There’s all sorts of things in the ‘Big Beautiful Bill’ that are quite expansive for the supply side economy.”

TRADE CERTAINTY

He said a similar virtuous cycle is underway regarding trade. 

“We now have trade deals that cover almost 60% of global GDP, including the U.S. Just like the tax, not only has the uncertainty resolved, but it's been replaced with tailwinds in the form of the investment commitments that other countries have made as means to secure the tariff rates that they secure,” he said. 

Miran was recently nominated by President Donald Trump to the role of Federal Reserve governor. Because of a pending confirmation process, Miran said he could not comment on matters related to the central bank or monetary policy. His nomination comes amid relentless pressure from the White House on the Fed to lower interest rates. 

Asked if he’s still confident in a forecast for second half growth of 3% made to MNI back in June, Miran said: “I do think there’s reasons for expecting growth to perform quite well as we look forward to what’s changing.” (See MNI INTERVIEW: Miran Sees 3% H2 Growth, Flurry Of Trade Deals)

NO TARIFF INFLATION

Miran is vindicated by what he sees as evidence that tariffs have not thus far proved inflationary as many economists had predicted, even as they are generating a significant amount of revenue that can help reduce the budget deficit. 

“We don’t see any evidence that tariffs are inflationary in a meaningful sense,” he said. “Could that happen down the line? I don’t know. I'm sort of like a ‘never say never’ kind of person. So obviously you have to allow for some possibility that there is some increase in prices at some point." 

"However, I don't see any evidence to date, and I think the track record is pretty clear on this, because we ran this experiment in 2018 and we know what happened,” he said.

He said the rise in good prices is tough to pin on U.S. tariffs because it has also been experienced by other economies. In addition, Miran believes disinflation is likely to persist because of ongoing declines in housing inflation. 

“There's actually pretty strong arguments that rent disinflation is going to continue to actually be a meaningful contributor to lower inflation,” he said. 

These include the catch-up of rent-listed prices with the official measures of housing inflation, as well as lower rent costs from declining immigration because of Trump's deportations and immigration restrictions, he said, adding: “I view the border policies as extremely disinflationary."