I want to weigh in on the Trump economic boom, which was on display again today, with surprisingly strong manufacturing numbers in the industrial production report. Consumer goods and professional equipment are booming. Over the past two months, production of consumer goods has increased at an annual rate of about 8 percent. While professional equipment operates at around 7 percent, and for the past year at over 10 percent.
The Atlanta Fed’s PIBNow is pricing in a running rate of 5.3% for the fourth quarter of 2025.
Core retail sales have increased more than 5 percent over the past year. Core consumer prices rose just 1.6 percent annually in the fourth quarter. And wages are significantly above inflation, as workers’ take-home pay continues to rebound under President Trump after Biden’s collapse.
As I have said many times, let’s not make this economic boom story any more difficult 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 as part of the historic One, Big, Beautiful bill, all of which are paying off left and right. American worker productivity is hitting its fastest pace in decades as workers get their pay raises. Unit labor costs, which include compensation and productivity, increase barely, by just over 1 percent.
US Treasury Secretary Scott Bessent comments on the latest round of interviews with the Federal Reserve Chairman and the investigation into current Chairman Jerome Powell on ‘Kudlow’.
Energy prices, which permeate the economy, will lower inflation even further. And to quote our Treasury official, Scott Bessent, the reprivatization of the economy is in full force, replacing President Biden’s big government socialism. And I personally believe that we are going to see economic numbers that could reach 5%, 6% or 7%.
The trade deficit is shrinking as deals are made around the world. Investors are flocking to America, which, as Mr. Trump said, is the most dynamic country in the world.
Customs tariff inflation is virtually non-existent. The left-wing press and the mainstream economics profession were mostly wrong. There could even be a tariff dividend at some point. But what’s important is that the federal budget deficit is falling.
Growth solves a lot of problems. New opportunities for prosperity allowing all actors in society to climb the ladder of success appear every day. And I bet Mr. Trump will provide a teaching moment at Davos for all those socialist-leaning globalist corpocrats about why Mr. Trump’s America is thriving and the power of free-market capitalism, Trump-style.
