In less than two years, the policies passed by the Republican congress as pushed by President Trump have proved to be wildly successful in energizing the American economy.
The core principles of Trumponomics: low tax rates, rollback of (productivity-destroying) regulations and fair international trade has again made the United States the world’s strongest economic engine.
Even in the face of some of these trade skirmishes (not yet wars) and rapidly rising interest rates by the Federal Reserve, this week we had proof — surging real income, soaring productivity, high job creation and record low unemployment.
Over the last 12 months, wages and salaries (not including benefits) increased by 3.1%, considerably above the 2.3% growth in inflation (Consumer Price Index), illustrating that we have real income gains.
Productivity has now surged over 2% (2.2% in Q3) for two consecutive quarters. This is about double the annual productivity growth during the Obama years.
Jobs increased by 250,000 in October well above the 190,000 that were forecasted. Such recent growth in jobs has reduced the unemployment rate to just 3.7%, the lowest rate since 1969 or nearly 50 years.
Recently former President Obama has been on the campaign trail trying to take credit for the recent economic surge but this only rings true for those who have no memory of his eight years in office. His administration didn’t achieve even one year of 3% GDP growth. His last year in office, 2016, produced a paltry 1.5% annual growth rate likely contributing to Hillary Clinton’s defeat.
Interestingly, the strength of the economy seems to be a relatively minor factor in the upcoming mid-term elections. Perhaps it isn’t all that surprising.
It is human nature to focus on what’s bad in our lives. If you’re sick, nothing else really matters until you’re well. Once you’re well, you almost forget that you were recently sick — but now everything else matters.
Virtually nothing is easier to take for granted than good health. This is where we are now as a nation. Our economy is extremely healthy allowing us to: (1) take it for granted for a change and (2) to move our attention to other issues that trouble us (mostly “First World” problems). As the recent stock market sell-off reminds us though, it is never a good idea to take for granted that which is good in our lives because it can change in a literal heartbeat.
Let’s at least try to celebrate this amazing economy.
