Calculated Risk blog on the economic outlook post-election

I have been following Bill McBride's Calculated Risk blog since around the time the housing bubble was getting close to bursting, leading to the Great Recession. So this is a blog that has mattered a lot to me for over a decade and a half at this point. Bill knows his stuff. I think real estate is more his beat, but he runs a good general purpose economics blog that serves my purpose. One thing Bill has done is to take a look at the economic outlook post-election. As is his custom, a week on, he has his initial assessment for the economy Trump is inheriting, and what Trump's policies might mean. In 2016, Bill was pretty sanguine about how the US economy would function with Trump in the White House. By 2019, he started to worry a bit, thanking (prematurely) his lucky stars that no major emergency, like a pandemic, had occurred. This time around, Bill is considerably less sanguine. At best, he's expecting that this latest Trump term will lead to increased budget deficits and as a result an increase in the national debt with very little to show for it. Trump's policies may lead directly to a recession, depending on the details. One thing that is truly different from 2016 was that back then the Millennial generation was really coming into its own economically. That demographic is not quite as much of a factor. Many millennials are now well past 40 and the youngest of that cohort are in their very late 20s. As a generational cohort, they are now past their peak in terms of first-time home buying, etc. The next generation, Gen Z, is going to be a much small cohort and simply cannot pick up the slack. So depending on how badly immigration policy gets botched, we may find ourselves as a nation with fewer people with disposable income. That's not the sort of trend you want to see. Bill is not quite ready to put the US on recession watch, but I would not be surprised if he does so within a few months. A lot will simply depend on what Trump messes up, and we know he will mess something up badly.

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