Ep 457: What You Need To Know About the 2025 Economy
HerMoney with Jean Chatzky
Deep Dive
Why is there significant economic uncertainty heading into 2025?
The uncertainty stems from the long-lasting effects of the pandemic, including supply chain disruptions, job losses, and economic shifts, combined with the upcoming presidential transition and President-elect Trump's unpredictable policy priorities.
What are the structural economic issues in the U.S. that have persisted since the 1980s?
Since the 1980s, the U.S. economy has experienced growing income inequality, with top earners seeing much faster income growth than the bottom half. Key goods like housing, healthcare, and college have become increasingly unaffordable for most Americans, creating widespread economic instability.
What is the economic impact of tariffs according to economists?
Tariffs are considered economically destructive because they increase consumer prices and create unpredictable ripple effects. For example, tariffs on one product can lead to price hikes on related goods, and they often provoke retaliatory measures from other countries, complicating trade relations.
Why is childcare considered a market failure in the U.S.?
Childcare is a market failure because the private supply is neither affordable nor adequate to meet demand. High costs and limited availability make it inaccessible for many families, particularly those earning less than $50,000 a year, leading to a growing reliance on informal or subsidized care.
What is the predicted GDP growth for the U.S. in 2025, and what does it indicate?
Wall Street analysts predict U.S. GDP growth adjusted for inflation will be slightly over 2% in 2025, indicating a modest economic slowdown but not a catastrophic one. The economy remains cyclical, with expansions and contractions being a normal part of its trajectory.
What advice does economist Catherine Edwards give for managing personal finances in uncertain times?
Edwards advises focusing on controlling what you can, such as managing spending habits, improving credit scores, and maintaining a diversified investment portfolio. She emphasizes long-term financial planning over short-term market speculation to build stability and resilience.
- Pandemic's economic reverberations lingered far longer than the pandemic itself
- U.S. economy shed 22.5 million jobs in a single month in 2020
- Economic problems have 40 years of antecedents, rooted in structural instability and inequality since the 1980s
Shownotes Transcript