FOX Business host Larry Kudlow gives an update on the state of the US economy on 'Kudlow.'
Of course, business is booming. Who do you think creates jobs? That is an important question. The answer is not consumer spending, which is what 99% of overeducated economists and media types will tell you. A business that creates job opportunities. And of course, jobs are up.172,000 in May. Three months ago 188,000 average. April and March saw 93,000 updates. All of these results are double what was predicted, but the point I want to make is that jobs are not created out of thin air. They are made up of profitable businesses, big or small.
And the important part about Trumpian economic policy is that as a former businessman, he knows how the American economic engine really works. So you've given business significant supply-side tax relief with a 100% depreciation, as well as lower corporate taxes, and lower taxes for small businesses. And that bet pays off big.
And here is another important point. Even with the Iran war rising with inflation, wages still outpace prices. For all workers over the past year, average hourly earnings rose 3.4% and hours worked rose 0.9%. You have to add them together to get total wage compensation – most economists and journalists don't, so they're wrong – but that gives you a 4.3% wage yield and that's still higher than the temporarily inflated CPI of 3.8%. The unemployment rate is 4.3%.
Last year, foreign-born workers fell by more than 100,000, while native-born jobs rose by nearly 400,000. There is no consequence of losing the AI function so far.
But let me take it back to the importance of business. You must have a healthy, profitable business to have the resources to hire more workers and pay better wages and salaries. If you lose money, you will lay off workers and reduce wages.
Fox News contributor Newt Gingrich says Democrats are in danger of becoming the 'pro-Iran Party' to 'Kudlow.'
Therefore profit, which is the mother's milk of the stock and the blood of the economy, is very important. Macroeconomists, especially from northeastern and bicoastal universities do not seem to understand this. And their media graduates don't understand this. Profitability is key, it's not a dirty word. So when President Trump cut the income tax in one big positive bill, he knew what he was doing. He was creating job opportunities with high salaries.
Then follow the real economic logic, to make money effectively, a profitable business hires more workers, pays better wages, and those wages are the wages of working families sitting at the kitchen table. And that becomes what is called consumer spending.
But business comes first and the mind goes to what is called consumer spending. People don't seem to understand that, but this is how our free enterprise economy works. As the late Jack Kemp said, the problem with Democrats is that they like jobs, they just don't like business that creates jobs.
Now there were a bunch of tax cuts for individuals: tips, overtime, social security, seniors, all in one, big, beautiful bill.
And here's the last point about profits, they grow. And because they're booming, and because business is booming, wages are going to go up and the economy is going to grow faster than anyone thinks. If only Republicans would talk about this in the middle.
