Last Thursday, Donald Trump rang the opening bell at the NYSE. During the visit, Jim Cramer conducted a short interview with the president, asking, among other things, whether it was worth buying more stocks…
Jim Cramer: “What can you say to the working person who owns stocks. Should they buy more stocks?”
Donald Trump: “I don’t want to get into a situation where they do and we can have a dip or something. It can always happen. You know that better than anyone else in the world.”
It is quite unusual for Trump to talk about a possible decline. Especially when we recall his first term, when the performance of the stock market was very important to him. One interpretation may be that Trump realizes that implementing some of his campaign promises could cause declines on the stock market.
In the short term, a reduction in government spending, including employment, and a reduction in immigration, or even some deportation of some illegal immigrants, could even mean a recession. And Elon Musk will certainly want to deliver some success within the DOGE department.
Figure 1 shows real government spending. Fortunately, the share of real government spending in total real GDP has fallen in recent years – see Figure 2.
Figure 3 shows the US Labor Force by native-born and foreign-born. Figure 4 shows the YoY change.
And Figure 5 presents the cumulative change in Labor Force since November 2019. All of the Labor Force growth over this period is foreign-born workers. So much of the strong US consumer and spending is due to increased immigration… what if that were to reverse?
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