Economist Justin Wolfers is downplaying optimism surrounding the recent U.S. GDP figures, which surprised to the upside at 4.3% for the July to September quarter, while warning that current policy choices are preventing the benefits of this from reaching most Americans.
Trump’s ‘Anti-Robinhood’ Policies
On Sunday, Wolfers cautioned against reading too much into early estimates of economic performance, noting that these figures “could get revised away” at any time, while appearing on MS Now’s “The Weekend Primetime.”
Wolfers said the more important question is not whether the economy is technically expanding, but whether that growth is producing meaningful improvements for households, to which he said that there was a good argument that it was not.
See Also: After A 4.3% GDP Boom, Traders Bet US Economy Cools Next
According to the University of Michigan economist, this imbalance was due to the policy choices of President Donald Trump, which he termed as being “anti-Robin Hood,” for aiding the rich at the expense of the poor, particularly pointing to the tariffs, which he said take a “bigger chunk” of the paycheck of low-income households.
Wolfers also criticized budget priorities under the Trump administration, saying they disproportionately hurt vulnerable households. The Trump budget managed to find ways to cut “things back for low-income folks, except when it comes to taxes,” he said.
He added that upcoming tax changes will further skew benefits toward wealthier Americans. The poor are now “going to be paying more, and high-income folks are getting all the tax cuts,” Wolfers said.
While acknowledging that the economy is showing signs of expansion, Wolfers stressed that policy choices are preventing that growth from being broadly shared. “I think the economy as a whole is actually growing somewhat,” he said.
GDP Grows, But Personal Income Flat
Economist David Rosenberg, of Rosenberg Research, called the headline GDP figures a “fugazi” last week, warning that the underlying economic weakness was being masked by government spending, and that the “true” growth, according to his calculations, was at a meager 0.8%.
Others, such as economist Peter Berezin of BCA Research, have raised similar concerns, highlighting discrepancies in the official figures.
On Sunday, in a post on X, Berezin highlighted that the “real personal income” in the data from the U.S. Bureau of Economic Analysis showed “zero growth,” despite the strong GDP figures, which he found to be “fishy.”
However, Shark Tank investor, Kevin O’Leary, however, praised the figures, saying, “On the GDP number alone, this administration has a pretty good scorecard,” while noting that inflation and tariff-related pressures are continuing to weigh on the economy.
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