Donald Trump is inheriting a good economy, as well as inspiring some enthusiasm with his growth plans.
The National Federation of Independent Business’ (NFIB) index jumped 7.5 percent last month to its highest point since 2004. NFIB owners are trending optimistic, looking to invest and hire.
“Rising confidence adds to the economy’s upward momentum,” Jim O’Sullivan, chief U.S. economist at High Frequency Economics in Valhalla, N.Y., said in a note to investors. “NFIB membership appears to be disproportionately Republican, so it is possible that the data will start overstating strength, opposite the pattern during the Obama administration.”
Meanwhile, the U.S. economy has been growing at a nearly 3 percent annual rate since summer.
“I think that Trump is like the tail, and the dog in this fight is the fundamentals of the economy, and, quite frankly, a lot of these trends that we now associate with the Trump election were in place starting in the summer,” Jim Paulsen, the chief investment strategist of Wells Capital Management, said in December. He added that Trump also has inspired some “animal spirits” with talk of faster economic growth on top of good fundamentals.
The stock market has increased 250 percent since 2009 lows. Corporate profits are rising, and we’re heading into an eighth year of economic growth.
Those who own a lot of stocks, bonds and real estate, the wealthiest, did the best during the recovery. The working class only recently got back above water with modest wage increases.
The bailout of the financial and automotive industries, however unsavory, saved millions of jobs, including parts suppliers. The federal loans were repaid with interest. More jobs followed in these now-strong sectors.
And a lot of bad-actor banks paid billions in fines and restitution for malfeasance through settlements with the SEC and Department of Justice.
The Obama recovery was slower than hoped for but better than Trump has portrayed. Meanwhile, only 37 percent of voters approve of Trump’s performance during this presidential-transition period, according to a Quinnipiac University poll last week. Still, 52 percent of Americans are confident in the economy over the next four years. And Obama leaves office with a 55 percent approval rating, according to the poll.
It’s Trump’s economy now.
Neal St. Anthony
Bankers see wage growth momentum in 2017
A growing U.S. economy will boost jobs and push wages even higher, according to a report Thursday by the American Bankers Association’s Economic Advisory Committee.
The group — 17 economists from the nation’s largest banks — expects the economy to repeat 2016 by adding another 1.9 million jobs this year. It also expects the economy to add another 1.8 million jobs in 2018, the same year that the U.S. jobless rate is expected to drop to 4.5 percent.
There will be increased “competition for workers, fostering wage pressures,” the economists said. The committee predicts hourly wages will rise by 2.7 percent in 2017, the fastest pace in eight years.
The search for qualified workers remains a sore spot for manufacturers and other industries nationwide.
Many factory heads complain that they already struggle with the nation’s low unemployment rate, now at a low 4.6 percent. Manufacturers say they already pay well — offering new hires wages that are above $19 an hour.
Now economists predict that such figures will only rise higher, because competition is fierce for new hires that can program, fix and run several automated machines at the same time.
Minnesota Chamber’s legislative priorities
The Minnesota Chamber of Commerce, the state’s biggest business lobby, wants to stop Minneapolis and St. Paul from passing their own minimum-wage and sick-leave ordinances, which might create employer-costly “islands.” The chamber, and other business outfits have a related suit pending before a Hennepin County judge. They look for a state law to preclude maverick cities in this regard. The chamber also:
• Wants some of the state’s $1.4 billion projected surplus over the fiscal 2017-18 biennium to go toward business property tax relief by lowering income tax rates on “pass-through” business income and an expanded research-and-development tax credit. The Republican-majority legislature and chamber also want the state to conform to the higher federal estate-tax exemption.
• Is involved in negotiations to reform and stabilize the individual health care market, which supports the self-employed and those with defined contributions and which is small but experienced devastatingly high premium increases under the Affordable Care Act. The chamber also opposes new health care mandates that drive cost and is looking to help reform federal law changes that may impact the state’s portion of Medicaid.
• Seeks an increase in long-term investments in roads, bridges and transit but is at odds with the Gov. Mark Dayton’s administration on gas tax increases and use of general fund revenue.
The state chamber’s legislative priorities are at: www.mnchamber.com.
Neal St. Anthony