Donald Trump inherits Biden economy at a tricky time
Donald Trump will inherit, to all appearances, a solid economy when he assumes the presidency in January. After all, the stock market is at record highs, unemployment is low by historical standards and gross domestic product has been expanding at a healthy pace of around 2.5% so far this year. Yet there’s a reason for voter dissatisfaction with the economy and, beneath the surface, there are several risks for Trump 2.0 as he thinks about enacting his trade and fiscal agenda.
Let’s start with jobs. Trump took over a stable labor market in 2017, with the unemployment rate falling throughout the previous year and payroll growth steady at roughly 200,000 a month. That’s not true this time around: The jobless rate has been on the rise, hiring is below normal and payroll growth has cooled since the first quarter.
The three-month average for private payrolls additions at 78,000 from June to August was the slowest since 2010 outside of the pandemic period. (The September number is still subject to revision and October was heavily affected by a strike and hurricanes). The level of job openings relative to the size of the workforce has fallen back to pre-Covid levels and continues to decline. While the deterioration in the labor market has been gradual, Trump’s team will need to reverse this negative momentum quickly if he wants to sustain the economic expansion and hold on to his electoral gains in the 2026 midterm elections.
This may prove tricky if Elon Musk, the world’s richest man, takes charge of an efficiency
