The president delivered a powerful messages to the World Economic Forum in Davos, Switzerland: “The world is witnessing the resurgence of a strong and prosperous America.”
By almost any economic measure Trump was correct. The U.S. economy grew 2.3 percent last year, the best growth in two years, and it has grown at a rate of around 3 percent in the last three quarters. American exports increased by 5.5 percent last year, a 180-degree turn from the decline in exports that was seen in 2016. As a result of those increased foreign sales, American factories added nearly 200,000 jobs last year, a sharp contrast to when manufacturers were cutting jobs in 2016. And the Dow Jones industrial average has increased by more than 40 percent since Election Day, which equals nearly $7 trillion in increased wealth for the 55 million Americans with a 401(k), the 20 million with IRAs and the millions more with pension plans.
Even wages, which have remained stagnant despite low levels of unemployment, have begun trending up under President Trump. A recent survey from the National Association of Business Economics found that nearly half — 48 percent — of respondents said their wage and salary packages increased during the last three months. None announced pay cuts. That difference is the highest it has been since January of 2000 – more than 17 years ago. Even more promising, the NABE survey found that wage increases are likely to be even more widespread over the next three months, as the index for expected wages costs increased from 46 to 58, the highest level since the question was added to the survey in 2014.
And all of this is before taking the effect of Republican’s tax reform plan into account. Nearly every day is met with another company announcing bonuses, investments and expansions in corporate giving resulting from tax reform. Most recently, hardware store Home Depot announced bonuses of up to $1,000 for its hourly workers, drug giant Pfizer announced a $5 billion investment in manufacturing and other capital projects, and package carrier FedEx committed more than $2.3 billion to wage increases.
Democrats like House Minority Leader Nancy Pelosi, who obviously miscalculated the impact that tax reform would have, are nevertheless sticking to their guns, calling thousand dollar bonuses and billions in investments “crumbs.”
Tell that to hardware giant Apple, which announced a plan to bring $250 billion in profits back to America, create 20,000 jobs, open a new business campus and pay $38 billion in taxes to the Treasury. Which of those eye-popping figures would Ms. Pelosi like to classify as “crumbs”?
And if Democrats needed further proof that the Trump economy is humming they need only take a look at the most recent jobs report. As Ben Casselman writes for the New York Times:
As the unemployment rate has fallen in recent months and the economy has roared, one central question has bedeviled the American job market: Where is the wage growth?
New data on Friday suggested an answer: It is here, and it is now.
Average hourly earnings jumped 2.9 percent in January from a year earlier, the Labor Department said on Friday, the latest sign that the long, slow economic recovery is at last reaching Americans’ pocketbooks. Separate data released this week showed that private-sector wages and salaries rose 2.8 percent in the final three months of 2017 compared with a year earlier, the fastest growth since the recession.
“People have been wondering when the wages are going to start to rise,” said Catherine Barrera, chief economist of the online job marketplace ZipRecruiter. “I think that over the first six months of this year, we’re really going to start to see the wages rise.”
Part of the reason is that employers are continuing to add jobs at a time when unemployment is already low. According to the report, employers added 200,000 jobs in January, beating market expectations by a sizable margins. Employers are hiring to keep up with demand, but the lack of slack in the labor pool means that workers are able to demand wage increases in return for their increasingly scarce services. This is the tipping point economists have long been waiting, and it is coming as a result of Trump’s willingness to step on the economic accelerator
“I believe in America,” Mr. Trump told an auditorium on the last day of the annual World Economic Forum. “As president of the United States, I will always put America first, just like the leaders of other countries should put their country first also. But America first does not mean America alone. When the United States grows, so does the world.”
And in that sense, the world should look on happily because America is growing. Fast.