Economic Boon Under Trump: Business Profits Fuel Job Growth and Wage Increases

FOX Business host Larry Kudlow provides an update on the current state of the U.S. economy on ‘Kudlow.’

The business sector is thriving, with Kudlow posing a thought-provoking question: who creates jobs? He asserts it’s not merely consumer spending, but businesses that generate employment opportunities. The evidence supports this: 172,000 jobs were added in May, with an average of 188,000 over the past three months. Notably, April and March saw upward revisions of 93,000 jobs. Kudlow underscores that job creation isn’t arbitrary; it stems from profitable, revenue-generating businesses, regardless of size.

Kudlow attributes much of this success to Trump’s business-centric economic policies, which include substantial supply-side tax relief, full expensing provisions, reduced corporate tax rates, and lower small business taxes. Kudlow argues these policies have yielded significant returns.

Another key indicator is wage growth, which continues to outpace inflation, despite a temporary spike due to the Iran conflict. Average hourly earnings have risen by 3.4%, while aggregate hours worked have increased by 0.9%. Combining these figures yields a total wage income growth of 4.3%, surpassing the temporarily inflated 3.8% Consumer Price Index (CPI). The unemployment rate remains steady at 4.3%.

Over the past year, foreign-born workers have decreased by more than 100,000, while native-born job numbers have surged by nearly 400,000. Kudlow observes no significant impact on job losses due to AI advancements.

Crucially, Kudlow emphasizes the necessity of robust, profitable businesses to drive job creation and higher wages. Businesses operating at a loss typically resort to layoffs and pay cuts.

Newt Gingrich, a Fox News contributor, warns on ‘Kudlow’ that Democrats risk becoming what he terms the ‘pro-Iran Party.’

Kudlow reiterates the importance of profits, describing them as the “mother’s milk of stocks” and the “lifeblood of the economy.” He argues that macroeconomists from prestigious northeastern and coastal universities, along with their media counterparts, often fail to grasp this concept. He highlights Trump’s tax cuts as a strategic move to stimulate job creation and higher wages.

Kudlow elucidates the economic logic: successful, profitable businesses hire more workers and offer better compensation, which ultimately translates to increased consumer spending. He references the late Jack Kemp’s observation that Democrats may support jobs but often overlook the businesses that create them.

Kudlow also notes the substantial tax cuts implemented for individuals, including adjustments to tips, overtime, social security, and senior taxes, all encapsulated in the “big, beautiful bill.”

Finally, Kudlow highlights the booming profits, which he believes will lead to significantly increased wages and accelerated economic growth, surpassing most projections. He urges Republicans to emphasize these achievements during the midterms.