During his 2024 presidential campaign, Donald Trump repeatedly blamed President Joe Biden and Vice President Kamala Harris for inflation in the United States. His messaging worked: Trump pulled off a narrow victory, defeating Harris in both the electoral and popular votes.
Trump didn’t win by a “landslide,” as “War Room” host Steve Bannon, Rep. Rick Scott (R-Florida) and other far-right Trump supporters have been claiming. The president-elect, according to the Cook Political Report, won the popular vote by roughly 1.5 percent. But he successfully used voters’ anxiety over inflation to his advantage.
Nonetheless, the U.S. has had low unemployment rates under Biden’s presidency. According to the U.S. Bureau of Labor Statistics (BLS), unemployment was only 4.2 percent in November.
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In an article published on December 18, the New York Times’ Ben Casselman emphasizes that Trump is inheriting a “stable” economy from Biden/Harris — and addresses fears that the stability coud disappear.
“After five years of uncertainty and turmoil,” Casselman explains, “the U.S. economy is ending 2024 in arguably its most stable condition since the start of the coronavirus pandemic. Inflation has cooled. Unemployment is low. The Federal Reserve is cutting interest rates. The recession that many forecasters once warned was inevitable hasn’t materialized.”
The Times reporter continues, “Yet the economic outlook for 2025 is as murky as ever, for one major reason: President-elect Donald J. Trump. On the campaign trail and in the weeks since his election, Mr. Trump has proposed sweeping policy changes that could have profound — and complicated — implications for the economy.”
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Possible Causes for concern, according to Casselman, include new tariffs, mass deportations, and regulation changes that could “make the financial system more prone to crises over the long run.”
Michael Gapen, chief U.S. economist for Morgan Stanley, told the Times, “It is a very uncertain outlook, and most of that uncertainty comes from potential changes in policy…. There’s a wide range of potential outcomes, and a base-line outlook isn’t quite as useful as it is in normal times.”
Economist Michael Strain of the American Enterprise Institute warns that changes in “trade and immigration policy could be extremely disruptive to the economy” and lead to slow growth combined with high inflation.
Strain told the Times, “In this scenario, the price of imported goods, the price of groceries, the price of restaurant meals, the price of homes all shoot up dramatically.”
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Read Ben Casselman’s full New York Times article at this link (subscription required).
