As President-elect Donald Trump prepares to take office, Moody’s Analytics chief economist Mark Zandi says the economy is doing remarkably well.
Speaking on Wednesday at the Consumer Federation of America’s financial services conference, Zandi highlighted a few areas that were particularly bright: The stock market is up, productivity and business formation rates are high, and the GDP has been increasing at a rate of about 3%.
According to Zandi, the economy is resilient.
“I do believe there are some potential storms coming next year under the new administration,” he continued.
Immigration policy, tariffs could affect economy
Zandi anticipates that Trump would move swiftly to impose tariffs and deport immigrants, two actions that might have a significant effect on the American economy.
According to Zandi, I think President Trump will follow through on his campaign promises. He will pursue the policies with a great deal of vigor.
According to Zandi, immigration has contributed significantly to the economy’s success.
Others concur. In a May note to clients, Goldman Sachs analysts noted that recent immigrants have disproportionately flooded into the labor force segments that were most in need of workers in 2022, helping to fill those gaps.
In the meanwhile, Zandi stated that tariffs cause a great deal of uncertainty for firms. They may therefore result in job losses.
He stated that tariffs are likely to have an impact on people’s spending as well.
Zandi stated that it is a tax rise that will result in increased expenses for consumers.
According to a recent National Retail Federation assessment, Trump’s uniform tariff ideas could result in a sharp increase in the cost of apparel, toys, furniture, home appliances, shoes, and travel accessories.
Trump has stated that he will apply a 10% or 20% tariff to all imports.
In almost all six retail sectors that the trade group looked at, the NRF discovered that the tariffs would cause sharp price increases of double digits.
According to the estimate, the price of apparel, for instance, may increase by 12.5% to 20.6%. This implies that a pair of men’s jeans that would normally cost $80 will now cost between $90 and $96.
According to the NRF analysis, which referenced statistics from the Bureau of Labor Statistics, these higher costs would put a strain on consumer budgets, particularly for low-income households, which spend three times as much of their after-tax income on clothing as do high-income households.
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