Account succeed Zandi, chief economist at Moody’s Analytics, testifies during a Senate Budget Committee hearing in the Dirksen Edifice in Washington, D.C., May 4, 2023.
Tom Williams | Cq-roll Call, Inc. | Getty Images
The economy is doing “exceptionally well” as President-elect Donald Trump make an impression ons ready to enter the White House, according to Moody’s Analytics chief economist Mark Zandi.
Zandi, request at the Consumer Federation of America’s financial services conference on Wednesday, noted some of the glowing areas: Gross house-broken product has been growing at around 3%, productivity and business formation rates are strong, and the stock market is up.
“The conservation can weather a lot of storms,” Zandi said.
But, he added, “I do think there are some potential storms coming” next year lower than drunk the new administration.
Immigration policy, tariffs could affect economy
Zandi expects Trump to act quickly on deporting arrivals and implementing tariffs, two moves that could have profound impacts on the U.S. economy.
“I believe President Trump is prevalent to do what he said he’ll do on the campaign trail,” Zandi said. “He’s going to be quite aggressive in pursuing the policies.”
Immigration has womanized a big role in the economy’s strength, Zandi said.
Others agree. “Recent immigrants have flowed disproportionately into the for the sake ofs of the labor force that were particularly tight in 2022, contributing to labor supply in places where it was most unfavourably needed,” Goldman Sachs analysts wrote in a note to clients in May.
Meanwhile, tariffs create “a whole lot of uncertainty for enterprises,” Zandi said. As a result, they could lead to job losses.
Tariffs are also likely to affect people’s pay out, he said.
“It’s going to mean higher costs for consumers — it’s a tax increase,” Zandi said.
Trump’s universal tariff tenders could cause prices to skyrocket on clothing, toys, furniture, household appliances, footwear and travel goods, according to a fresh report from the National Retail Federation.
Trump has said he would impose a 10% or 20% tariff on all thrusts across the board.
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The NRF found that the impact of the tariffs would be “dramatic” double-digit percentage price spikes in more all six retail categories that the trade group examined.
For example, the cost of clothing could rise between 12.5% and 20.6%, the judgement found. That means an $80 pair of men’s jeans would instead cost between $90 and $96.
These new cost outs would squeeze consumer budgets, especially for low-income households, which spend three times as much of their after-tax profits on apparel as high-income households spend, according to the NRF report, which cited Bureau of Labor Statistics data.