White House economic report

The White House on April 13 released the 2026 Economic Report of the President, including a chapter that says diversity, equity and inclusion hiring practices cut United States output. (whitehouse.gov) The annual report is written by the Council of Economic Advisers, the White House economics office created by the Employment Act of 1946. This year’s report runs through 14 chapters, from taxes and trade to artificial intelligence, housing and a chapter titled “The Economic Consequences of DEI.” (whitehouse.gov) (govinfo.gov) The White House release says that chapter “quantifies the Gross Domestic Product cost of distortive, non-merit-based, DEI hiring.” In the chapter itself, the Council of Economic Advisers says it studies the link between sector productivity and what it calls an “unexplained minority manager share” after controlling for state, industry and year effects. (whitehouse.gov 1) (whitehouse.gov 2) The chapter argues that minority representation in management rose faster between 2016 and 2023 than in the prior decade, and says that jump reflected expanded corporate diversity, equity and inclusion efforts. It cites McKinsey & Company reports as one influence on employers that adopted targets for minority representation in management. (whitehouse.gov) (mckinsey.com) The social-media figure of about $100 billion a year tracks a rough scale, not a number highlighted in the White House release. With United States nominal gross domestic product at about $31.4 trillion at a seasonally adjusted annual rate in late 2025, a drag of roughly one-third of 1 percent would equal about $100 billion. (fred.stlouisfed.org) (bea.gov) Productivity is the amount of output produced per hour worked, and the Bureau of Labor Statistics said nonfarm business productivity rose 1.8 percent in the fourth quarter of 2025 and 2.2 percent for 2025 annual averages. The Council of Economic Advisers chapter argues that identity-based hiring can lower that output-per-hour measure by putting workers in jobs that do not fit their skills as well. (bls.gov) (whitehouse.gov) The chapter lands after a year of federal action against diversity, equity and inclusion programs. President Donald Trump signed Executive Order 14151 on January 20, 2025 to end federal government diversity, equity and inclusion programs, and the White House said on March 26, 2026 that he had also ordered federal contractors to stop what it called “racially discriminatory” diversity, equity and inclusion practices. (govinfo.gov) (whitehouse.gov) Federal civil-rights law still bars employment discrimination based on race, sex and other protected traits. The Equal Employment Opportunity Commission said in guidance updated in 2025 and 2026 that diversity, equity and inclusion programs can be unlawful if they drive employment decisions based on protected characteristics, but the agency did not say all such programs are illegal. (eeoc.gov 1) (eeoc.gov 2) The White House report does not settle the wider argument over whether diversity programs help or hurt performance. McKinsey’s 2020 report said companies in the top quartile for ethnic and cultural diversity on executive teams were more likely to outperform peers on profitability, a finding often cited by employers that defend inclusion efforts. (mckinsey.com) What happens next is likely to be less about this report alone than about how agencies, contractors and courts treat hiring rules in 2026. The White House used its flagship economic report to put that fight inside the administration