I want to weigh in on the Trump economic boom, which showed up again today, with surprisingly strong manufacturing numbers in the industrial production report. Both consumer goods and business equipment are booming. Over the past two months, the production of consumer goods is rising roughly 8 percent at an annual rate. While business equipment is running at roughly 7 percent, and for the past year over 10 percent.
The Atlanta Fed GDPNow is on a run rate of 5.3 percent for the fourth quarter of 2025.
Basic core retail sales are up more than 5 percent for the last year. Core consumer prices rose only 1.6 percent annually in the fourth quarter. And wages are running significantly above inflation, as working folks’ take-home pay continues to rebound under President Trump after the Biden collapse.
As I’ve said so many times, let’s not make this economic boom story any harder than it needs to be. Tax cuts, deregulation, “drill, baby, drill,” and free and fair trade are pro-growth policies put in place by Mr. Trump and his team, and passed in the landmark One, Big, Beautiful, Bill — are all paying off left and right. The productivity of working Americans is running at its hottest pace in decades, as labor is earning its pay hikes. Unit labor costs, which captures compensation and productivity, are barely rising at a bit over 1 percent.
Energy prices, which permeate the economy, are going to bring inflation even lower. And to quote our Treasury Man, Scott Bessent, the reprivatization of the economy is in full force, replacing President Biden’s big government socialism. And I personally believe we’re going to see economic numbers that could run 5 percent, 6 percent, or 7 percent.
The trade gap is narrowing, as deals are coming in around the world. Investors are flocking to America, which as Mr. Trump has said, is the hottest country in the world.
Tariff inflation is virtually nonexistent. The lefty press and the mainstream economics profession by and large got the story wrong. There might even be a tariff dividend at some point. But importantly, the federal budget deficit is coming down.
Growth solves a lot of problems. New prosperity opportunities to climb the ladder of success, for everyone in society are popping up on a daily basis. And I’ll bet you Mr. Trump will work up a teaching moment for all those socialist-leaning globalist corpocrats at Davos, on why Mr. Trump’s America is booming and the power of free-market capitalism, Trump style.
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