Larry Kudlow: Thriving Economic Momentum in Detroit

President Trump delivered an electrifying speech at the Detroit Economic Club, heralding what he describes as a “Trump boom” that has emerged more rapidly than critics on the left are willing to acknowledge. This event, aptly titled “Booming at Detroit,” showcased his unwavering optimism about the current economic landscape.

He kicked off his address with a bold proclamation: “Under our administration, growth is exploding. Productivity is soaring. Investment is booming. Incomes are rising. Inflation is defeated. America is respected again. Like never before.” True to his style, after an hour of covering various topics, he wrapped up with a spirited declaration: “My spirit is restored. Inflation is stopped. Wages are up, prices are down. Our economy is booming, like I think you’ll see soon, like never before.”

It was a pleasure to hear him speak again at the Detroit Economic Club. I had the opportunity to travel with him back in 2016 when he first addressed the audience that summer. Detroit, often regarded as the heartland of America, is experiencing a significant resurgence.

I’ve consistently maintained that Trump’s policies—focused on tax cuts, deregulation, energy independence with “drill, baby drill,” and reciprocal trade—are yielding positive results. With a bit of luck, we could witness GDP growth after inflation of 5 percent in the fourth quarter of this year. The three quarters under Trump’s leadership that began last spring are projected to deliver economic growth exceeding 3 percent, possibly reaching 4 percent.

Businesses are thriving, new factories are emerging, and productivity is reaching staggering heights. The stock markets are hitting record highs. The president’s assertion that inflation is down and growth is up holds true. Energy prices are declining, contributing to overall economic growth. In fact, in the fourth quarter, the topline CPI stands at just 2.1 percent annually, while the core rate, excluding food and energy, is at 1.6 percent.

The Federal Reserve’s targets are being met, indicating potential for easier monetary policy. It’s important to note that the full impact of the 25 percent drop in energy prices, which affects the entire economy, has yet to be fully realized. Additionally, concerns about tariff-induced inflation have not materialized as anticipated.

In the fourth quarter, goods prices have increased by only 1.4 percent annually, with core goods rising a mere 0.2 percent. This is a remarkable achievement, indicating no significant tariff inflation.

On the inflation front, unit labor costs remain at rock bottom, just over 1 percent in recent quarters. This suggests that while wages have increased, the workforce has earned these pay hikes through enhanced productivity—a perfect combination for economic health.

Mr. Trump’s perspective stands in stark contrast to that of Jerome Powell, the Fed chair, who has often been criticized for his decisions. While I don’t wish to vilify Mr. Powell, I believe he has not performed well in his role. The sooner we see a change in leadership at the Fed, the better it will be for the economy.

President Trump delivered an electrifying speech at the Detroit Economic Club, heralding what he describes as a “Trump boom” that has emerged more rapidly than critics on the left are willing to acknowledge. This event, aptly titled “Booming at Detroit,” showcased his unwavering optimism about the current economic landscape.

He kicked off his address with a bold proclamation: “Under our administration, growth is exploding. Productivity is soaring. Investment is booming. Incomes are rising. Inflation is defeated. America is respected again. Like never before.” True to his style, after an hour of covering various topics, he wrapped up with a spirited declaration: “My spirit is restored. Inflation is stopped. Wages are up, prices are down. Our economy is booming, like I think you’ll see soon, like never before.”

It was a pleasure to hear him speak again at the Detroit Economic Club. I had the opportunity to travel with him back in 2016 when he first addressed the audience that summer. Detroit, often regarded as the heartland of America, is experiencing a significant resurgence.

I’ve consistently maintained that Trump’s policies—focused on tax cuts, deregulation, energy independence with “drill, baby drill,” and reciprocal trade—are yielding positive results. With a bit of luck, we could witness GDP growth after inflation of 5 percent in the fourth quarter of this year. The three quarters under Trump’s leadership that began last spring are projected to deliver economic growth exceeding 3 percent, possibly reaching 4 percent.

Businesses are thriving, new factories are emerging, and productivity is reaching staggering heights. The stock markets are hitting record highs. The president’s assertion that inflation is down and growth is up holds true. Energy prices are declining, contributing to overall economic growth. In fact, in the fourth quarter, the topline CPI stands at just 2.1 percent annually, while the core rate, excluding food and energy, is at 1.6 percent.

The Federal Reserve’s targets are being met, indicating potential for easier monetary policy. It’s important to note that the full impact of the 25 percent drop in energy prices, which affects the entire economy, has yet to be fully realized. Additionally, concerns about tariff-induced inflation have not materialized as anticipated.

In the fourth quarter, goods prices have increased by only 1.4 percent annually, with core goods rising a mere 0.2 percent. This is a remarkable achievement, indicating no significant tariff inflation.

On the inflation front, unit labor costs remain at rock bottom, just over 1 percent in recent quarters. This suggests that while wages have increased, the workforce has earned these pay hikes through enhanced productivity—a perfect combination for economic health.

Mr. Trump’s perspective stands in stark contrast to that of Jerome Powell, the Fed chair, who has often been criticized for his decisions. While I don’t wish to vilify Mr. Powell, I believe he has not performed well in his role. The sooner we see a change in leadership at the Fed, the better it will be for the economy.