Larry Kudlow: Trumponomics Proving Effective as Midterm Victory Approaches
This week has brought a wealth of positive economic news, highlighted by a significant increase in jobs, particularly in the private sector. Additionally, a surprisingly low report on consumer prices has added to the optimism.
The stock market is currently hovering near 50,000, buoyed by booming productivity, low energy prices, and over a trillion dollars in deregulation at the EPA. A recent Gallup poll also indicates a rebound in economic confidence, with a 49-36% approval rating.
Given this backdrop, it’s puzzling to see the Wall Street Journal publish an editorial claiming that ‘America is Running out of Patience with Republicans.’
If there was ever a time to address affordability issues, it’s now, as the Trump Economy is thriving.
The latest January jobs report reveals that production workers are not only receiving pay increases but are also working more hours. This has led to what some economists, including myself, refer to as the wage income proxy—calculated by multiplying hourly earnings by hours worked—jumping to an impressive 5.6% annual rate over the past three months.
In contrast, today’s CPI inflation report shows a modest 2.4% rise over the same period, resulting in a real wage take-home pay increase of 3.2%.
To reiterate: wages and hours worked have increased by 5.6%, while the CPI has only risen by 2.4% in three months.
Trumponomics is delivering tangible results.
The workforce is earning these pay hikes through remarkable productivity gains, and businesses are enjoying strong profitability, with only a 1.1% increase in unit labor costs.
Technology is thriving, and demand for energy is on the rise. President Trump is lifting restrictions on oil, gas, and coal—essential energy sources—by overturning the Obama-Biden endangerment finding, which was never legally enacted. This could potentially lower the average cost of autos by around $2,400, benefiting the middle class.
Factory construction is also experiencing a boom, marking one of the strongest sectors in the January jobs report. Much of this growth can be attributed to the President’s tariff-driven reciprocal trade policy.
Moreover, the implementation of 100% immediate depreciation write-offs is fueling a significant boom in business capital goods. This surge in new investment is expected to lead to stronger employment, higher wages, and ultimately, increased consumer spending power.
While President Trump mentioned this week that he and his team need to work harder to communicate their successes, the numbers are clearly in his favor.
Editorialists who cling to outdated left-wing criticisms reminiscent of the Biden administration should reconsider their stance.
Trumponomics is proving effective, and a midterm election victory for Republicans appears increasingly likely.
This week has brought a wealth of positive economic news, highlighted by a significant increase in jobs, particularly in the private sector. Additionally, a surprisingly low report on consumer prices has added to the optimism.
The stock market is currently hovering near 50,000, buoyed by booming productivity, low energy prices, and over a trillion dollars in deregulation at the EPA. A recent Gallup poll also indicates a rebound in economic confidence, with a 49-36% approval rating.
Given this backdrop, it’s puzzling to see the Wall Street Journal publish an editorial claiming that ‘America is Running out of Patience with Republicans.’
If there was ever a time to address affordability issues, it’s now, as the Trump Economy is thriving.
The latest January jobs report reveals that production workers are not only receiving pay increases but are also working more hours. This has led to what some economists, including myself, refer to as the wage income proxy—calculated by multiplying hourly earnings by hours worked—jumping to an impressive 5.6% annual rate over the past three months.
In contrast, today’s CPI inflation report shows a modest 2.4% rise over the same period, resulting in a real wage take-home pay increase of 3.2%.
To reiterate: wages and hours worked have increased by 5.6%, while the CPI has only risen by 2.4% in three months.
Trumponomics is delivering tangible results.
The workforce is earning these pay hikes through remarkable productivity gains, and businesses are enjoying strong profitability, with only a 1.1% increase in unit labor costs.
Technology is thriving, and demand for energy is on the rise. President Trump is lifting restrictions on oil, gas, and coal—essential energy sources—by overturning the Obama-Biden endangerment finding, which was never legally enacted. This could potentially lower the average cost of autos by around $2,400, benefiting the middle class.
Factory construction is also experiencing a boom, marking one of the strongest sectors in the January jobs report. Much of this growth can be attributed to the President’s tariff-driven reciprocal trade policy.
Moreover, the implementation of 100% immediate depreciation write-offs is fueling a significant boom in business capital goods. This surge in new investment is expected to lead to stronger employment, higher wages, and ultimately, increased consumer spending power.
While President Trump mentioned this week that he and his team need to work harder to communicate their successes, the numbers are clearly in his favor.
Editorialists who cling to outdated left-wing criticisms reminiscent of the Biden administration should reconsider their stance.
Trumponomics is proving effective, and a midterm election victory for Republicans appears increasingly likely.
