DETROIT, MICHIGAN - SEPTEMBER 02: Flanked by labor union leaders, Democratic presidential candidate Vice President Kamala Harris speaks to union workers during a campaign event on September 02, 2024 at Northwestern High School in Detroit, Michigan. Harris is scheduled to host another event in Pennsylvania later in the day. Scott Olson/Getty Images
Goldman Sachs estimated that the US economy would see its biggest growth boost over the next couple years if Democratic Presidential Nominee Kamala Harris were to win the White House along with Congress this November.
As shared by Reuters, Goldman Sachs said in a report, a Democratic sweep would probably have a net positive impact on economic growth and labor market performance, as well as fiscal health, relative to a Republican administration.
Goldman Sachs also estimated that a Harris administration would lead to faster job growth, adding 10,000 more jobs every month than if former President Donald Trump won with a divided government.
With a Democratic sweep, new spending initiatives and expanded middle-income tax credits are expected to more than offset the drag from higher corporate tax rates, resulting in a slight net gain in overall GDP growth.
In contrast, Bloomberg reported that if Republicans were to secure a sweep or even a divided government led by Trump, Goldman Sachs predicts a potential decline in economic output. This scenario would likely result from increased tariffs on imports and stricter immigration policies, which could negatively impact job growth and GDP.
The report notes that such policies might lead to a peak reduction in GDP growth by 0.5 percentage points in the second half of 2025, with some recovery expected in 2026.
Current Market Reaction to Trump and Harris
CNN shared that Donald Trump winning the election, particularly with JD Vance-who is known for his strong stance against China-as his vice-presidential running mate, has already led to some changes or instability in the financial markets.
This market reaction was observed in July, indicating that investors are concerned about the potential economic impact.
At the same time, the report also suggests Trump's potential presidency could lead to higher tariffs on car imports and increased core inflation. However, if Kamala Harris wins the election, she is expected to counteract these negative effects, leading to a more stable economic situation.
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