Kewsong Lee, co-chief executive officer of the Carlyle Group LP, speaks during the Bloomberg Invest Summit in New York, U.S., on Tuesday, June 5, 2018.

Victor J. Blue | Bloomberg | Getty Images

A Carlyle Group co-CEO said the U.S. economy will avoid a recession next year, despite slowing down.

“Probably not,” the private equity firm’s co-CEO, Kewsong Lee, told CNBC’s Wilfred Frost on “Squawk on the Street” on Wednesday when asked about a 2020 recession. “My confidence level isn’t as high as it was maybe a year ago, but I do still think there’s enough positive momentum, especially coming from the consumer sector … that we’re going to not see a recession.”

The trade war between the U.S. and China and weakness in the manufacturing industry has caused investor worries about whether the U.S. is slipping into a recession. The Federal Reserve lowered interest rates three times this year to offset some of the weakness. However, a tight labor market and a strong U.S. consumer is keeping the economy in the longest economic expansion in U.S. history.

“The consumer sector is certainly strong and it’s offsetting some of the weakness we’re seeing in industrial,” said Lee.

Lee is anticipating an “extended period of slower-than-ideal growth.” He expects policy issues and a lot of volatility. “That environment is going to be a slow sideways grind for a lot longer than people might think,” Lee added.

Lee said he is hopeful for a phase one trade deal but “there are lots of structural issues” as the U.S. and China learn how to coexist.

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