If you read PayScale’s Election Prediction, you know that we, like pollsters everywhere, totally called the results of the election. #nailedit (Meaning, of course, that we did not nail it. At all. But we did mention our respondents are typically younger and more highly educated than the average American voter, which clearly influenced our forecast.)
At least half the country is likely feeling a little anxiety about the future, so we’re providing some information around what’s likely to happen in regard to the economy and the job market—based on expert opinion—and offering what advice we can when it comes to your job and career.
And what is our advice? Sit tight for a minute. Honestly, we’ve never before had a President like Donald Trump, so nobody really knows what’s going to happen.
As pointed out by virtually every media outlet, President-Elect Trump’s economic plans have been rather light on details, but what steps he has proposed—tax cuts, erecting international trade barriers, cutting environmental and business regulations, reducing the size of the labor force by deporting many of America’s 11 million undocumented immigrants—are predicted by analysts and pundits to have significant effects.
As explained by USA Today’s Paul Davidson, “Donald Trump’s victory in the presidential election Tuesday is likely to intensify business uncertainty in the near term and slow economic growth over the next few years as the nation probably retreats from open-trade policies that have defined the past generation and cracks down on undocumented workers, economists say.”
Indeed, as the likelihood of a Trump victory began to sink in on Tuesday night, the Dow Jones Industrial Average Futures dropped 750 points, breaking the record of a 684-point drop on the first day of trading after the attacks of September 11, 2001.
In response to this terrifying drop, The New York Times‘ Paul Krugman warned, “We are probably looking at a global recession, with no end in sight.”
But just before the end of trading yesterday, Wednesday, the Dow briefly added more than 300 points, close to a record high, eventually closing up more than 250 points. Stocks in banks and financial services, biotech firms, oil, gas, mining, and construction were trading especially high, likely due to the assumption Trump’s presidency will mean less regulation than was expected under a Clinton presidency.
Reacting to these gains, Davidson wrote, “Experts generally have tamped down forecasts that had called for a possible recession by 2018 based on the assumption that even a Republican Congress will pass only modified versions of Trump’s proposals. Some economists say the Federal Reserve is likely to forgo an anticipated interest rate hike in December and generally keep rates lower for longer, mitigating some of the damage to economic growth and financial markets.”
Mark Zandi, chief economist of Moody’s Analytics, was quoted in Davidson’s article as saying of Trump’s victory, “It’s not a cataclysmic event for the economy. [But] at the very least, it means the economy will grow more slowly than would otherwise be the case.”
Zandi went on to say the shock and uncertainty generated by Trump’s win will likely cause businesses to be more cautious in their hiring and investment, which is bad news for job seekers. But he still expects the economy to grow at roughly 1.75 percent, creating jobs, but about 400,000 fewer annually than were forecast before Tuesday night.
The uncertainty may cause businesses to be more cautious in hiring, but the economy is still expected to grow.
Take all of this with a grain of salt. Economists are greatly divided on what Trump’s plan might do, some predicting a recession worse than 2008, some saying we’ll likely see very little change, and a few even claiming it may actually help the economy grow at a faster rate. As we learned on election night, predicting the future is a near-impossible task.
What does all this mean for workers? Hopefully, after the markets settle down and recover from this initial shock, the economy will continue to grow, just at a slower pace than previously expected. And even had the results been different, there would be no guarantees. Despite all the bluster in this election cycle, the President has little power over the economy. In fact, according to a 2014 research paper by Princeton professors Alan Blinder and Mark Watson, fluctuations in the economy may have more to do with luck.
Wrote The Atlantic’s Derek Thompson, “Maybe we’d be better off thinking about international economics less like Washington’s little private laboratory and more like the weather—a massive force we cannot hope to control, even as we debate how to respond to its worst excesses.”
So the advice we’re offering is this: In terms of your job and career, don’t make any hasty moves. Wait to see what happens when and if the markets level off. Hopefully, at least when it comes to the economy, everything will be relatively OK. Trump’s win might mean it may take a little longer to land that next great job or earn that big raise, but we should be able to rest a little easier when it comes to dodging the bullet of yet another global recession.
Tell Us What You Think
Do you think Trump’s presidency will affect the job market and the economy? We want to hear from you. Tell us your thoughts in the comments or join the conversation on Twitter.