Opinion from Fox News, by E.J. Antoni. He brings up points that on the one hand are obvious, but that I had not considered.
E.J. Antoni, Ph.D., is Chief Economist and the Richard F. Aster fellow at the Heritage Foundation and a senior fellow at Unleash Prosperity.
If you’re struggling to make sense of the economy today, you’re not alone. Many so-called experts completely whiffed their forecasts, while positive economic data — the Dow Jones Industrial Average at 50,000 points — seemingly contradicts negative survey responses. But understanding five key elements reveals we’re about to be off to the races.
First, 2025 was a year of transition for the economy. Under Democrat President Joe Biden, particularly his last two years in office, job growth was disproportionately due to government hiring. Similarly, government purchases played an outsized role in growing overall economic activity, as measured by gross domestic product (GDP).
President Donald Trump turned off those spigots, slamming the brakes on government spending growth and firing a record number of bureaucrats at the federal level. Shrinking the unproductive public sector while growing the private sector is a welcomed change, but it initially shows us as a negative in many economic metrics.
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