It has already been a year since the induration of President Donald Trump. At the time of his arrival at the White House, many on the left and the Never-Trumpers prognosticated that the economy would collapse, the unemployment rate would skyrocket, and Trumponomics would be a disaster for the poor and middle-class. So far, the U.S. economy is booming, the jobless rate is tumbling, and Trumponomics seems to be far superior to Obamanomics.
Scott Adams, creator of the legendary Dilbert character, wrote last year that his foes would eventually turn to, “Effective, but we don’t like it.” Small business buoyance is surging, consumer confidence is at a 17-year high, and corporations are investing in America again.
Let’s look back over the last year and rejoice in many of the positive economic stories:
Dow Jones Surpassed 26,000
When Trump took over the Oval Office, the Dow was trading at 19,827. On January 16, the Dow Jones Industrial Average (DJIA) broke above 26,000 for the first time in history. A more than 6,000-point gain in the first full year of a new administration is quite impressive, whether you approve of the president or not.
Stocks Hit All-Time Highs
If you are an investor, then you are probably fairly satisfied with your returns. A plethora of both bland and sexy stocks experienced meteoric increases, many of which soared to record highs. The FAANGs (Facebook, Amazon, Apple, Netflix, and Google) posted all-time highs, while small market cap shares also rose to levels unseen before.
The Rise of Saudi America
The shale-oil revolution kicked off a couple of years before Trump moved in at 1600 Pennsylvania Avenue. But the rise of Saudi America accelerated over the past year. Exiting the Paris Accord helped: U.S. crude is trading well above $60 per barrel, U.S. output is inching towards 10 million barrels per day (bpd), and the Organization of the Petroleum Exporting Countries (OPEC) has been brought to its knees.
Drill, baby, drill!
Corporate America Gives Workers a Raise
President Trump and the Republicans passed tax legislation that slashed the corporate tax rate from 35% to 21%. This is in line with the average among Organisation for Economic Co-operation and Development (OECD) nations, and companies are celebrating.
Since the business community is expected to see massive savings on their tax bills, corporations are passing the savings onto consumers, raising staff pay, giving everyone a bonus, and improving employee benefits and perks. From Walmart to JPMorgan to American Airlines, millions of Americans anticipate receiving some tax reform benefit this year.
President Scraps TPP and Revisits NAFTA
When she was Secretary of State, Hillary Clinton declared the Trans-Pacific Partnership (TPP) to be the “gold standard” of trade agreements. It was a globalist trade pact that benefitted the special interests, the politicians, and the crony corporations. Thankfully, one of President Trump’s first acts was to scrap the TPP. And now he is taking a second look at the North American Free Trade Agreement (NAFTA).
NAFTA was drafted when the computer was in its infancy stage, Internet connections were not ubiquitous, and the digital economy wasn’t yet born. To revisit NAFTA is a no-brainer – but you don’t need government-managed trade to achieve real free trade.
Job Creation Gets a Boost
President Trump promised jobs, jobs, jobs on the campaign trail. He has delivered, as the U.S. economy added more than two million jobs in 2017. And other employment numbers are admirable: black unemployment plunged to a record low of 4.1%, the labor force participation rate is flat, and the U.S labor market has six million job openings.
Manufacturing Returns to America
Is Trump making American manufacturing great again? The Institute for Supply Management (ISM)’s factory index rose to 59.7 in December, up from 58.2 a month earlier – anything above 50 indicates expansion. The ISM also revealed that new orders jumped to 69.4, the best reading in more than a decade, and measure of production climbed to 65.8, the highest since May 2010.
Businesses and Consumers Are Confident
National Federation of Independent Business (NFIB)’s Small Business Optimism Index – Scott Adams calls it “the new Presidential Approval Poll” – reached an all-time high in 2017. U.S. consumer confidence surged to a 17-year high in November. U.S. investor optimism is rising as well, as the Wells Fargo/Gallup Investor and Retirement Optimism Index climbed to its highest level since September 2000.
Too Much Winning?
When Trump launched his presidential bid, he promised a lot of winning for America. He joked that there would be so much winning that Americans would get sick and tired of it. There may be a lot of files to tackle, and a lot of resistance from the media, but it looks like Year One of the Trump era, at least on the economic front, has been better than expected.
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