Whose economy is it?

Investing.com -- It is now clear that former U.S. President Joe Biden’s economy was built on excessive government spending and immigration. From January 2021 through January 2025, it is estimated by the Committee for Responsible Federal Budget that Biden added $4.7 trillion in ten-year debt via legislation and executive orders. Current President Donald Trump is taking a very different approach in his second term, cutting government spending, deporting illegal aliens, and using tariffs to collect revenue and bring back manufacturing to the U.S.

While early in his term, President Trump’s actions, most notably the tariffs, are already impacting the economy, but to what extent, and how can one answer the question “whose economy is it?”

President Trump appears to be playing both sides of the fence on the matter.  He has repeatedly pushed commentary that anything bad in the economy is from Biden. Likewise, anything good is his. 

“I think the good parts are the Trump economy and the bad parts are the Biden economy because he’s done a terrible job,” Trump said in an interview with NBC’s Meet the Press on Sunday.

To answer the main question, we looked at recent economic datapoints and tried to determine which administration’s policies were the main driver of the data.

The three most important economic reports over the past several weeks were: the April jobs report, the Q1 GDP report, and the Consumer Price Index.

April non-farm payrolls

On May 2, April nonfarm payrolls were reported at 177,000, topping the consensus of 138,000. However, February was revised down by 15,000, and March was revised down by 43,000. The unemployment rate was steady at 4.2%.  Looking deeper at the data, employment in health care, transportation and warehousing, financial activities, and social assistance trended up and federal government employment declined. Employment in manufacturing showed little change, while in government, federal government employment declined by 9,000 in April and is down by 26,000 since January.

Investing.com’s take.  The federal government job cuts are related to both Biden and Trump.   Biden bloated the government while Trump trimmed it down.  The headline data was mixed, as the revised lower total was more than the beat.

Q1 GDP report:

On April 30, first quarter GDP showed a drop of 0.3%, versus the consensus of a 0.2% drop and a 2.4% increase in the fourth quarter.  The biggest takeaway was that GDP in the first quarter primarily reflected an increase in imports, which are a subtraction in the calculation of GDP, and a decrease in government spending.

Investing.com’s take: The increase in imports in the first quarter is clearly related to Trump’s policies, as companies scrambled to import goods before tariffs took hold.

Consumer Price Index

On April 10, CPI was reported to be down 0.1 percent versus expectations of a 0.1% increase.   The most significant driver was the decline in gas prices, which fell 6.3%.

Investing.com’s take: Trump’s "drill baby drill mantra" since he took office is clearly negatively impacting oil and gas prices.  However, worries about a future recession are also contributing to the drop.

Conclusion

Overall, although President Trump is distancing himself from economic troubles by claiming they are not the result of his actions or policies, a closer look at key economic indicators above reveals that his influence is already clearly present. The underlying impact in the economic reports highlighted above suggests the current conditions can be traced to decisions and policies he has already implemented. Whether those impacts are positive or negative, they reflect his administration’s imprint. This is, in fact, already Trump’s economy, and he needs to start taking credit for both the good and the bad.