How Will Trump Impact the Economy?
Multiple analyses of Trump's economic plans project that his presidency is likely to reignite inflation.
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Updated on March 11
Trump slashes Education Department workforce by 50%
Trump has long vowed to get rid of the Department of Education (ED), but doing so would take an act of Congress. He can, however, blunt its impact.
On Tuesday, the ED announced it would be reducing its workforce by 50% as of March 21. The press release referred to it as the department’s “final mission.”
However, certain functions of the ED are guaranteed under the law including, as the release mentions, formula funding; federal student loans and Pell grants; funding for special needs students; as well as competitive grantmaking.
Education Secretary Linda McMahon said the move was part of the department’s “commitment to efficiency, accountability, and ensuring that resources are directed where they matter most: to students, parents, and teachers.”
The ED began the year with 4,133 workers. Since Trump entered office, a total of 1,950 have left from a combination of Tuesday’s firings (1,315); probationary worker layoffs last month (63); and staff who left voluntarily with severance (572). The workers laid off this week will continue to receive pay and benefits until June 9, as well as severance pay.
Trump won’t rule out recession
President Donald Trump stoked recession fears following a Fox News interview that aired on Sunday when he didn’t deny the possibility of a recession. He told Fox News, “I hate to predict things like that. There is a period of transition, because what we’re doing is very big. We’re bringing wealth back to America. That’s a big thing. And there are always periods of, it takes a little time. It takes a little time, but I think it should be great for us.”
Trump’s presidency has been marked by volatility in the markets, largely due to his will-he-won’t-he tariff policies. The S&P 500 reached all-time highs following Trump’s re-entry to the White House but has since dropped; the index is now down 2.6% since Inauguration Day.
Approval is mixed on Trump’s handling of the economy
The Economist/YouGov (March 1-March 4). Some 46% of those surveyed strongly or somewhat disapprove of Trump’s handling of inflation/prices, while 42% strongly or somewhat approve and the remaining have no opinion. When it comes to jobs and the economy, those surveyed were split 44% to 44% on approval and disapproval of Trump; 11% had no opinion.
NPR/PBS NewsMarist (Feb. 24-Feb. 26): Some 42% say the direction that Trump is taking with the U.S. economy is for the better, while 46% say it’s for the worse. However, 11% say there is no real change. And when it comes to prices, 57% of Americans surveyed say the price of groceries will likely increase in the next six months, while 26% say prices will remain the same and 17% say prices would decrease.
On Jan. 20, Donald Trump was sworn in to the presidency and quickly launched a bevy of executive orders.
The orders freeze federal hiring; withdraws the U.S. from the Paris Climate Agreement; halts the TikTok ban for 75 days; restricts birthright citizenship — a right guaranteed by the 14th Amendment; bars asylum to those arriving at the Southern border; and establishes the Department of Government Efficiency. He further made several orders intended to increase the oil supply.
Trump additionally revoked around 80 executive orders that former President Joe Biden made during his term. Trump also pardoned nearly 1,600 members of the Jan. 6, 2021 attack on the Capitol.
Trump did not enact any tariffs, as he promised to do on the first day of his presidency, but he did order a review of trade policy. And, during a press conference later that day, said Canada and Mexico could see a 25% tariff as soon as Feb. 1. During the conference, Trump also indicated that he “may” impose a universal tariff.
On the financial side, Trump ordered all heads of executive departments and agencies to “deliver emergency price relief,” and included a list of appropriate actions. Verbatim, the order called to:
Lower the cost of housing and expand housing supply.
Eliminate unnecessary administrative expenses and rent-seeking practices that increase healthcare costs.
Eliminate counterproductive requirements that raise the costs of home appliances.
Create employment opportunities for American workers, including drawing discouraged workers into the labor force.
Eliminate harmful, coercive “climate” policies that increase the costs of food and fuel.
Trump’s campaign promises
Here are some of the major proposals Trump made during the 2024 election, along with the opinions of economists and other experts on how those promises could play out.
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