White House economic advisor Kevin Hassett says economy is still on track for 3% growth

Key Points
  • Two new reports bolster the case for 3% U.S. economic growth in 2018, says Trump advisor Kevin Hassett.
  • Retail sales and manufacturing output both rise for the month of May.
  • "Usually the data like what saw today tends to build momentum in a quarter," he says.
Council of Economic Advisors chairman Kevin Hassett on the state of the US economy
CEA chairman Kevin Hassett on state of the US economy

White House Council of Economic Advisers Chairman Kevin Hassett is still betting that the U.S. economy will grow 3% this year.

While the current model is 2% for second-quarter gross domestic product growth, two new reports out Friday bolster his case, he told CNBC.

First, retail sales rose in May, and sales for the prior month were revised higher. Also, U.S. manufacturing output increased in May, the first monthly gain this year. Both eased some concerns about the softening of the economy.

"Usually the data like what we saw today tends to build momentum in a quarter," Hassett said on "The Exchange."

"We're still looking at a 3% year, and I think there was some uncertainty about that before we saw these really strong reports."

Hassett, who will soon be leaving the White House, has been sticking with his projection all year.

The Trump administration was also calling for 3% growth for 2018, but in the end, the year closed short of that, with a 2.9% increase.

On Tuesday, Larry Kudlow, director of the National Economic Council, also predicted strong economic growth for 2019.

"We're in very good shape, and I think we'll maintain a 3% growth pace this year," Kudlow told CNBC's "Power Lunch."

"That 3% number is not contingent on a China deal that might not be satisfactory for American economic interests," Kudlow added.

However, Hassett was hopeful a deal between President Donald Trump and Chinese President Xi Jinping could ultimately be reached.

"The hope is at the G-20 meeting, that the two presidents can get together and start to get us closer to where we were a few months ago, where we were really, really close to having a deal."

The G-20 summit of world leaders is set to take place later this month in Japan.