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CNBC’s Jim Cramer expresses concern that there may be an excess of pessimism permeating Wall Street. On Monday, he noted that continued strong job growth among other factors could prevent a recession this year.
“Will tariffs be damaging? Yes. Will prices rise? Certainly. Could we experience shortages? Absolutely,” he remarked. “However, recessions are fundamentally linked to employment, and the number of available jobs still exceeds the number of people qualified to fill them.”
The fear surrounding a potential recession is intensified by worries about the impacts of President Donald Trump’s significant tariff increases. Nevertheless, Cramer contended that a recession is not inevitable. He believes companies may hesitate to lay off employees, fearing they won’t be able to hire them back when conditions improve.
Cramer further argued that it is challenging to disrupt an economy that continues to generate jobs. He anticipates that Friday’s labor report will show “fairly robust” numbers, making it difficult to “slip into a full-blown recession anytime soon.”
Investors are anxious that substantial tariff hikes, particularly on China, might compel companies to increase prices, thereby dampening consumer spending. Cramer mentioned that he’s “willing to bet that the American consumer learns to live with less.” Although some businesses could face challenges, he suggested that consumers might simply turn to more budget-friendly alternatives such as Costco and Walmart. He referred to the tariffs as a “government-mandated supply shock,” but noted that such shocks do not automatically lead to recessions.
“These two retailers possess more market power than any two companies I’ve encountered,” Cramer stated. “They can negotiate lower prices with their suppliers, including those in China.”
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