White House shrugs off concern over stock market drop saying US economy is ‘very strong’

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The White House has said that the fundamentals of the US economy are still strong despite the recent drop in the stock market.

The Dow Jones Industrial Average had dropped more than 1,100 points by close of trading on 5 February as worries increased about higher inflation and interest rates. Following last week’s dip, the S&P 500 had traded more than 1 per cent lower than before.

“Markets fluctuate, but the fundamentals of this economy are very strong and they are headed in the right direction,” White House spokesman Raj Shah told reporters on Air Force One. 

US President Donald Trump was in Ohio to tout that his newly-passed tax plan was cause for celebration because it was responsible for the current improvement in economic conditions. 

One official said to CNBC that “we’re always concerned when the market loses any value, but we’re also confident in the economy’s fundamentals.”

Mr Trump has tweeted 47 times in the last year about how the “record high” stock market was doing well and is a reflection of his leadership. 

During a speech at a factory in Blue Ash, Ohio, Mr Trump praised his recently-passed tax overhaul law.

He told Sheffer Corporation that “America is once again open for business.”

Mr Trump was there to tout that workers’ taxes “are going way down” and that American “factories are coming back.”

The President also criticised House Minority Leader Nancy Pelosi during the speech for her comment that Sheffer’s and other companies’ $1,000 bonuses to employees were just “crumbs.”

Several Democrats were in opposition to the new tax bill, which they said favoured the top 1% of earners in the economy, not the middle class who could have used the break more.

Ms Pelosi specifically had said: “You’ve set a banquet for the wealthy and corporate America and thrown a few crumbs” to the middle class.”

The real estate magnate who repeatedly flaunted his net worth during the 2016 campaign, hit out at Ms Pelosi for being wealthy and living in an expensive city like San Francisco.

He said it was “not a good day” for Ms Pelosi and referred to her as the “secret weapon” of Republicans who were likely to do well in the November election.

Overall, the Dow is up more than 30 per cent since Mr Trump’s election win.