President Trump will enjoy the backdrop of a solid economy as he delivers his 2nd State of the Union address Tuesday evening.
The President will point to the latest signs of US economic strength: Friday’s jobs report showed that employers added the most jobs in January in nearly a year. The proportion of Americans working or looking for work reached a roughly 5-year high. And a report showed that factory output rose at a healthy pace in December.
There are headwinds, but American businesses are defying them now.
Many analysts attribute the economy’s current health to The Trump’s Tax Cuts in late Y 2017 and a rise in government spending last year, as part of a budget deal between his Administration and Congress.
“No other major economy in the world did what we did,” said the global economist at Bank of America Merrill Lynch. “The stimulus did a very good job of covering up all the blemishes of the economy, including the risks of the trade war.”
Economic growth reached 3.8% last Spring and Summer, the fastest 6-month pace in 4 years. It also accelerated job gains at a time when many economists expected hiring to slow. With the unemployment rate already low, analysts thought that companies would have fewer unemployed people to hire.
Yet employers stepped up their hiring and drove the unemployment rate down to 3.7% in November, the lowest in nearly 50 years. It has since ticked up to 4%, partly because of government workers who were temporarily unemployed because of the shutdown.
White House officials say the good times will continue. Kevin Hassett, a Top administration economist, forecasts that growth will clock in at 3% a year for the next 10 years. He predicts that the administration’s corporate tax cuts will entice businesses to invest more in machinery, software and buildings, which will make workers more productive and generate longer-term growth.
The Fed had raised its benchmark short-term interest rate 4X last year — action that helped make mortgages and other consumer and business loans costlier. In December, the Fed’s policymakers said they envisioned raising rates 2X this year.
The Fed held its benchmark rate steady and sent its strongest signal to date that it saw no need to raise rates in the coming months, perhaps even for the rest of the year. Its message fueled the rally on Wall Street, which cheered the prospect of continued modest borrowing rates for the near future.
The Trump Policies are Working!
Tuesday, the major US stock market indexes finished at: DJIA +172.15 at 25411.52, NAS Comp +54.55 at 7402.09, S&P 500 +12.83 at 2737.66
Volume: Trade on the NYSE came in at 842-M/shares exchanged
- Russell 2000 +12.7% YTD
- NAS Comp 11.6% YTD
- S&P 500 +9.2% YTD
- DJIA +8.9% YTD
HeffX-LTN’s overall technical analysis of the major US stock market indexes is Bullish across the board.
DIA, SPY, QQQ, RUTX, VXX , DJIA, stocks, bullish,Fed, interest, rate, policy, pause, President, Trump, tax, cuts, jobs, businesses, growing, economy, strong,
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