Everybody is talking about $4.50 gasoline at the pump. And all the usual suspects from the lefty press, and of course the Democratic party, and even the business press that ought to know better, anyway, they’re all talking about recession.
Of course they’re against President Trump. They’re against the Iran war. And they love to crow about high energy prices destroying the Trumpian economy.
Only trouble is, not only are we not going into a recession — the economy is booming. It is picking up steam. Profits are the mothers’ milk of stocks and the lifeblood of the economy. And right now profits are soaring by 15 percent.
Here’s Mr. Trump earlier today on the subject: “So the Americans are benefiting. Working today we have the most working and we have 401k’s that their all time high, highest they’ve ever been.”
Mr. Trump added: “And that goes along with the stock market, which is the highest it’s ever been under my most favored nation agreements. This is something that I wish the media would talk about, because to me, it’s one of the biggest things ever to happen in our country.”
Now I do feel everyone’s pain regarding gas and diesel prices, and fertilizer prices on the farm. Yet it is a small price to pay to get ride of the Gestapo in Iran. Actually, less than 5 percent of consumer spending is affected by gas prices.
Meanwhile, the Atlanta Fed is looking at a huge 4.3 percent increase in second-quarter real GDP. That is a big number.
Under the hood, consumer spending, despite gas prices, is estimated to rise by 2.9 percent annually, and business capital investment by 9.4 percent annually. Wages, which mean more to working folks’ kitchen tables than GDP, are rising above 4 percent when you include hours worked.
Output per person or productivity is up a whopping 2.9 percent over the past year. Almost 3 percent.
And unit labor costs, which is the most basic price indicator in the whole economy, wages less productivity, is up only 1.2 percent over the past year.
The AI footprint is now bigger than the dotcom boom, according to John Carney.
And yes, topline prices are up by around 4 percent, but actually core goods prices, excluding food and energy, only 1.1 percent. So the tariff-flation craze never panned out.
Actually, if it weren’t for a one off bad import number last quarter, GDP would’ve been up 3.2 percent. That’s going to reverse this quarter and will drive the economy even faster. Here’s Treasury Man Scott Bessent earlier today:
“Sir, on the economy, two words: resilience and prosperity. The continued resilience of the economy speaks for itself even during the Iran conflict.”
Meanwhile, the stock market is just booming across the board. The Dow is holding above 50,000. And all the other stock indexes are making record highs, which is a sign of confidence in the future economy.
Did you know, by the way, that in America, total household wealth, which includes mainly stocks, bonds, real estate, and cash, is about $180 trillion. Which is about six times larger than our gross domestic product, or our federal debt in public hands. $180 trillion folks. It’s remarkable.
No country is even remotely close to that number. And on a per person basis, our GDP is more than $90,000. In Communist China, it’s less than $14,000.
The Chinese stock market hasn’t moved in years. And the United States is producing more oil and gas than anyone could ever imagine. We are the biggest supplier in the world today. This is the Trumpian economy. If only somebody would write about it.
Just think of it.
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