Jim Cramer believes excessive pessimism may be clouding Wall Street’s outlook, arguing that strong employment trends could prevent an economic downturn despite tariff concerns.
What Happened: “Will the tariffs hurt? Yes. Will prices go higher? Yes. Could there be shortages? Absolutely,” CNBC’s Cramer said Monday. “But recessions revolve around employment, and there are still so many more jobs than we have people to fill them.”
Recession fears have grown amid President Donald Trump‘s sweeping tariff hikes, especially those targeting China. However, Cramer maintains that companies are reluctant to lay off workers they might struggle to rehire when conditions improve.
“It’s difficult to derail an economy that is still creating jobs,” Cramer noted, predicting Friday’s labor report will be “fairly robust,” making it challenging to “slip into a full-blown recession any time soon.”
Why It Matters: Recent data support this optimism. March nonfarm payrolls surged by 228,000, exceeding the three-month average of 195,000 and economists’ forecasts of 135,000, according to the Bureau of Labor Statistics.
While many economists paint a bleaker picture—including Apollo Global Management‘s Chief Economist Torsten Slok, who predicted a “90% chance” of recession if current tariff levels persist—not all share this view. The CEO of Chevron Corp. CVX recently stated there were “no signs of a recession at this point.”
Cramer suggested that while some businesses may suffer from tariff-induced price increases, consumers could adapt by turning to budget-friendly retailers like Costco Wholesale Corp. COST and Walmart Inc. WMT.
“These two retailers have more market power than any two companies I’ve ever seen,” he said. “They can negotiate lower prices with their suppliers to offset the tariffs, including the Chinese.”
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