I know that the DJIA is not the economy, writ large, but I also know that it matters to a lot of people, and that it also provides at least one set of inputs from the broader economy. I also know that that politicians do like to note when stocks are strong and going upward, and when they are.
I will also caveat that a month’s worth of data is not a lot, but I would note the following. Trump, who keeps talking about Golden Ages and promised a magically delicious economy on the campaign trail, has been in office a month and change. Here’s the DJIA over the last month. I would note that the most signficant inputs into economic policy over this period of time have been one again/off again/on again/off again tariffs, lots of people losing their jobs (and by policy choice), and an increase in global instability due to Trump’s attacks on the basic global order. I would throw in a generally chaotic approach to government.
For kicks, here’s the DJIA for the last 12 months, 11 of which were under Biden.
But the current occupant of the White House told us the following this week:
Common sense has become a common theme, and we will never go back, never — ever going to let that happen. Among my very highest priorities is to rescue our economy and get dramatic and immediate relief to working families. As you know, we inherited from the last administration an economic catastrophe and an inflation nightmare.
He can try and create whatever unreality he wants, but the portfolios will speak for themselves.
The crazy thing is that I thought the incoming administration would do very little and then claim credit for the economy they had inherited. Instead, they appear to want to lie about what they inherited and then go about creating a new mess.
Please note what I am saying and not saying.
I thoroughly understand that the president does not control the DJIA. I also fully recognize that normally whatever was happening in the economy at this stage would mostly be follow-on from the previous administration. Indeed, to pick something very specific, I do not think that egg prices are at all linked to Trump policies (of course, they weren’t linked to Biden’s, either). The problem with avian flu started before Trump came to office and has accelerated since his election. That’s not his fault.
However, as noted above, he has engaged in a number of moves that are directly disruptive of the national (and global) economy. And the economy is reacting to those moves. It is not a coincidence (despite the cries of some) that the market takes a dive when Trump plays his tariff games.
Maybe it all gets corrected, but the administration is not making me confident, shall we say.
Indeed, as the AP notes, US economic worries mount as Trump implements tariffs, cuts workforce and freezes spending.
Since January, the economic policy uncertainty index has spiked 41% to a level, 334.5, that in the past signaled a recession. Nicholas Bloom, a Stanford University economist and co-developer of the uncertainty index, said it’s unclear how this will play out, but he’s worried.
“I have an increasing fear we will enter into what may become known as the ‘Trump recession,’” he said. “Ongoing policy turbulence and a tariff war could tip the U.S. economy into its first recession in five years.” That last recession occurred under Trump because of the coronavirus pandemic.
I guess we shall see.
Here’s the 5-year look that I initially had mistakenly put in for the 1-year one.
