Living in the Trump Era of Optimism, Prosperity and Strong Economic Growth
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- Just in case you missed this at the weekend, and remember Optimism leads to Power!
Friday’s blockbuster NFPs (jobs) data capped a long string of recent strong economic reports which has led to much brighter forecasts for American growth under US President Donald Trump.
The Atlanta Fed on Friday said it expects U.S. gross domestic product (GDP) to expand at a 4.8% pace in the second quarter, up from 4.7% on 31 May.
Friday’s revision was just the latest in a recent handful of surging revisions. On 25 May, the measure predicted four percent GDP growth.
Meanwhile, the New York Fed’s Nowcast also rose Friday, to 3.5% from 3.0% a week ago
Added to that, the government said Friday that U.S. job growth accelerated in May and the unemployment rate dropped to an 18-year low of 3.8%, pointing to rapidly tightening labor market conditions.
The strong employment report added to a string of recent upbeat economic data, including consumer spending, industrial production and construction spending, suggests economic growth was regaining speed early in the second quarter after expanding at a moderate 2.2% annualized rate in the January-March period, Reuters explained.
The Atlanta Fed forecasts a big boost in private sector fixed investment, which includes capital investment in machinery, land, buildings, vehicles, and technology.
The Atlanta Fed expected this to expand at a 4.6% rate but after the release Friday of a construction spending report from the U.S. Census Bureau and the Manufacturing ISM Report on Business from the Institute for Supply Management, the growth pace was increased to a 5.4% rate. Consumer spending is expected to grow at a 4.6% rate, up from 3.4% prior to the Friday data releases, the Atlanta Fed said.
NFPs rose by 223,000 jobs last month bolstered hiring at construction sites. There were big gainers in retail and leisure and hospitality payrolls. The economy created 15,000 more jobs than previously reported in March and April.
Last month’s 1/10% fall in the unemployment rate pushed it to a mark last seen in April 2000. The jobless rate is now where the Fed forecast it would be by the end of this year.
Average hourly earnings rose 8c, or 0.3% last month after edging up 0.1% in April. That pushed the annual increase in average hourly earnings to 2.7% from 2.6% in April.
“I believe we’ve entered into the longest largest prosperity in a couple of decades. I know it’s early in the game,” Larry Kudlow said in the interview.
“This is a prosperity era. It’s a strong economy. What you’ve got here is continued job growth, low unemployment, and participation rates pretty good,” said Mr. Kudlow.
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Have a terrific week.