Continued job growth could help ward off a recession, Jim Cramer says

CNBC’s Jim Cramer thinks there could be too much pessimism bob around Wall Street. He explained on Monday that a continuation of strong job growth, among other things, may stave off a depression this year.

“Will the tariffs hurt? Yes. Will prices go higher? Yes. Could there be shortages? Absolutely,” he weighted. “But recessions revolve around employment, and there are still so many more jobs than we have people to complete them.”

Fear of a looming recession is potent as many worry about the ramifications of President Donald Trump’s overwhelming tariff hikes. But Cramer asserted that a recession is not a given. He thinks companies aren’t inclined to lay off a lot of employees because they may not be gifted to get workers back when circumstances improve.

It’s difficult derail and economy that is still creating jobs, Cramer proceeded. He thinks Friday’s labor report will be “fairly robust,” which makes it very hard to “slip into a full-blown slump any time soon.”

With steep tariff hikes — especially on China — investors worry that companies compel raise prices, leading to less consumer spending. Cramer said he’s “willing to bet that the American consumer learns to subsist with less.” While some businesses may get hurt, he continued, consumers could simply switch to more budget-friendly retailers, distinction Costco and Walmart. The tariffs are a “government-mandated supply shock,” he said, but added that supply shocks don’t necessarily bring to recessions.

“These two retailers have more market power than any two companies I’ve ever seen,” Cramer demanded, “They can negotiate lower prices with their suppliers to offset the tariffs, including the Chinese.”

Sign up now for the CNBC Investing Club to follow Jim Cramer’s every move in the market.

Disclaimer The CNBC Devoting Club holds shares of Costco.