Larry Kudlow: The US Economy is Performing Better Than You Think

Caution on Tomorrow's Jobs Report

• ⚠️ The upcoming August employment report should not be the sole focus, as monthly job forecasts are highly variable and can miss targets significantly.
• 💡 The consensus for non-farm payrolls is 75,000, but actual numbers could range from 235,000 to a negative 85,000 due to the large number of people employed.
• 📉 Recent months have seen substantial downward revisions to job numbers, suggesting potential for more in the future.

Labor Market Indicators

• 📊 The ADP private sector jobs report showed a weaker-than-expected 54,000 jobs added, though its correlation with the BLS number is weak.
• 📌 The JOLTS report indicated a slight softening, with job openings (7.18 million) now less than the number of unemployed (7.2 million) for the first time since April 2021.
• 📈 Despite some softening, the unemployment rate remains low at 4.2%, and weekly unemployment claims show a stable labor market.

Economic Strengths and Growth

• ⚡ The ISM services report showed strength, coming in at 52%.
• 📈 Business investment in nondefense capital goods (excluding aircraft) is strong, with orders up 10% and shipments up 6% annually.
• 🚀 Nonfinancial corporate productivity has seen significant growth, up 3.4% over the past four quarters and 5.7% in the last quarter alone.
• 💰 Real wages are rising, and the CEA chair stated there is no tariff inflation.

Policy Impact and Outlook

• 🛠️ Policies aimed at generating new factories, such as 100% depreciation write-offs, appear to be contributing to economic buildout.
• ✅ The "working families tax cut bill" is expected to further boost the economy.
• 🎯 Overall, the economy is demonstrating resilience and growth that may be underestimated.