Jackie is the Vice President of Economics at ITR Economics, and oversees forecasting and applied research.
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In the midst of political turmoil, it is natural to wonder if an impeachment would rock the US economy. Short answer: If President Trump were convicted by the Senate, it would be highly unlikely that we would see long-term disruptions to the economy. As we also note during presidential elections, the economy is too big to be fundamentally disrupted by one person.
President Clinton‘s impeachment was initiated Oct. 8, 1998, and concluded Feb. 12, 1999. US Industrial Production was already in a Phase C, Slowing Growth, trend but maintained record levels throughout that entire impeachment period and for more than a year afterward. Furthermore, the month-to-month rise during the majority of that period was stronger than normal.
It would be normal to see short-term fluctuations due to the uncertainty of an impeachment trial, but the economy’s course is not going to be altered. The US economy, as measured by US Industrial Production, is already in Phase C, Slowing Growth, and we had been projecting a mild recession during the first half of 2020 long before the whispers of impeachment began. Ultimately, you control your ship in a storm. You have the ability to maneuver during the downturn and prepare for the rising trend ahead.