Examining The Economy That President-Elect Trump Is Inheriting
DAVID GREENE, HOST:
And as part of our coverage this morning, our colleague Danielle Kurtzleben has been here. We have the good fortune of having her in the studio talking us through what this new administration, how it could change our country's direction or not. Hey, Danielle.
DANIELLE KURTZLEBEN, BYLINE: Hey.
GREENE: Let's talk about the economy. I mean, it's - every number seems to suggest it's doing better than when President Obama took office. We're out of recession. The recovery is chugging along. Often, that's good news for an incoming president to have a strong economy. Is that the case?
KURTZLEBEN: Right, absolutely. Not only are a lot of figures looking better than when Obama took office; the trajectory is different. When Obama took office, we were plunging into recession. Right now, like you said, we are steadily getting out of it. We've had 75 months of job growth in a row. Consumer confidence is good. Wages are picking up. GDP has been kind of lackluster, but it picked up in the last quarter. And the stock market is up. All that looks great.
Now, one thing that could happen during a Trump presidency is that if things continue to improve, the Fed, as the saying goes, will have to take the punchbowl away. They might have to raise interest rates and keep things from overheating. That's not bad. That's the Fed's job. But, you know, Trump has accused them of playing politics in the past. So you could see a little bit of conflict there.
GREENE: So this could be really interesting. I mean, the Fed, at a moment when it will decide to act, the president can't really do anything about it. But he could come out and say, no, no, no, no, no. Don't play politics. You know, let the economy keep heating up. Or he could kind of back away and let the Fed do its thing and think long-term.
KURTZLEBEN: Right. And like you said, to be totally clear, the president does not have control over what the Fed does.
KURTZLEBEN: The Fed is independent.
GREENE: Just he has a big bully pulpit.
KURTZLEBEN: Right, yeah. However, Donald Trump will get to pick the next Fed chair. Janet Yellen's term is up in January of 2018. So that will be a huge decision that we'll all be watching.
GREENE: Are there any troubling signs right now in the economy that Donald Trump might have to deal with?
KURTZLEBEN: Well, you do have some overarching, you know, structural problems. Inequality was high when Obama took office. It's still high. It's growing. So it is possible that inequality could, at some point, hurt growth, you know, if you have a lot more Americans who have a lot less disposable income. And, you know, the stock market is really doing well. That doesn't really directly help a lot of Americans. You know, a lot of Americans just don't have money in the stock market.
Now, one headwind that's really particular to him is manufacturing. He has put all of his economic eggs in the manufacturing basket during the campaign.
GREENE: Saying jobs, jobs jobs.
KURTZLEBEN: Right, yeah. And the question is, how much can he grow that industry when it has just automated so much? Output is pretty good in manufacturing. But employment is lower. So it's a question of how much can he change an industry that really has undergone its own changes.
GREENE: OK, NPR's Danielle Kurtzleben. Thanks, Danielle.
KURTZLEBEN: Yeah, thank you.
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