Trade Deficit Data Are Misleading

Moody’s Analytics chief economist Mark Zandi joins Chuck Todd to break down what the numbers actually say about the U.S. economy—and why the headline optimism may be masking deeper problems. Zandi explains how upcoming tax refunds and delayed tax cuts will temporarily juice growth, even as that stimulus is entirely deficit-financed. Interest rate cuts are likely coming, but cautiously, and while AI stocks are soaring, the broader market is barely treading water. Beneath the surface, job creation has stalled, manufacturing jobs are shrinking under tariffs, and deportations aren’t translating into more employment for native-born workers as many expected.

The conversation widens to a fragile global outlook, with Trump-era protectionism accelerating deglobalization and reshaping trade, housing, and labor markets. Zandi details why college-educated workers are now seeing the sharpest rise in unemployment, how AI skills will define the next generation of jobs, and why renting often makes more sense than buying right now. Looking ahead to 2026, he warns of elevated geopolitical and financial-system risks, an AI-driven stock market that could be vulnerable to a correction, GDP growth likely under 3%, and a job market that may struggle to grow at all.

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Timeline:

(Timestamps may vary based on advertisements)

00:00 Mark Zandi joins the Chuck ToddCast

01:15 What do the numbers say about the state of the economy?

02:00 Big Beautiful Bill tax cuts about to start showing up

02:45 Tax refunds will add juice to the economy

03:30 All the “juice” is deficit financed and will only be temporary

04:30 Interest rates cuts likely to be cautious but will continue

05:45 AI stocks on fire, rest of the stocks are just up slightly

07:30 The economy isn’t creating any jobs despite investment

08:15 Job creation flatlined after “Liberation Day”

09:30 Manufacturing has been losing jobs due to tariffs

10:45 Are deportations creating more jobs for native born workers?

11:30 Jobs normally taken by foreign born workers aren’t being filled

12:45 Companies aren’t laying off, they’re just not hiring new employees

14:00 Trade deficit reportedly down, but is that actually a good thing?

14:45 Imports of pharmaceuticals have collapsed due to tariffs

15:30 Tariffs haven’t actually addressed the trade deficit

17:00 Tariff revenue shows the stated tariff rates aren’t holding true

18:15 Will the K-shaped economy continue through 2026?

19:45 Economy is affecting different income groups wildly different

21:00 Partisans believe economy is better depending on who is president

22:15 How do you price in Trump taking Greenland & ending NATO?

23:00 Economies around the world are in a similar, fragile place like the U.S.

24:00 The U.S. is rapidly pulling away from the rest of the world

25:00 Trump’s protectionism has been contagious to other countries

26:15 The world is preparing for a deglobalization

28:15 China hasn’t really taken advantage of U.S. global retreat

29:00 Countries that embrace immigration are the most successful

30:00 No country benefited more from globalization than China

31:45 USMCA has to be renegotiated, will probably remain status quo

34:00 Job market for new college graduates is very tough

34:45 Rise in unemployment is almost exclusively college educated

35:45 Proficiency in AI will be critical in future jobs

36:45 Classical higher education could make a comeback

38:45 Home ownership is unaffordable for many Americans

39:30 It’s better to rent than to buy in this market

40:30 There’s not a lot of buyers for prospective home sellers

41:15 Raising the capital gains exclusion could generate more sellers

43:45 There’s a chance the GOP could lose house majority before November

44:15 What risks that could upend the economy that concern you the most?

45:00 Geopolitical risk is very elevated

45:30 Stock market being buoyed by AI, could be ripe for correction

47:00 If there’s a major problem it will be in the financial system

47:30 If an AI company defaults, it could change the psychology of lenders

49:45 GDP growth will be under 3% in 2026

50:45 Will be tough to imagine positive job growth in 2026

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