The economy’s vital signs are stronger than they have been in years. Companies are posting jobs faster than they can find workers to fill them. Incomes are rising. The stock market sets records seemingly every month. As noted previously, the market is up about 30% since Trump’s election. It is up over 200% since 2009, when Obama was inaugurated. In recent Quinnipiac Poll, 66% of people feel the economy is “Excellent or Good.” That is the highest number ever recorded by this poll, Trump tweeted. In fact, this is the third-strongest bull market since 1929. Strong earnings and an accommodative Federal Reserve providing ultra-low interest rates continue to provide the impetus. With savings accounts and bonds offering such paltry returns, investors have little incentive to switch out of stocks. Trump’s push for deregulation and tax cuts has had an effect. Tax cuts for corporations could continue to boost stock market prices since lower taxes boosts profits and lower taxes encourage US-based multi-nationals to bring home foreign earnings. But history suggests they will use much of it to buy back their own shares which helps drive ups share prices. The present boom has been unusually long. 2018 is likely to be another year of declining US Dollar, primarily because it is a sign of the burgeoning health of other countries’ economies. Since global world health is buoyant few countries seem to mind if their currencies rise.
We must mention some items of concern, however: US auto sales fell 1.8% in 2017, ending seven years of growth. Trump’s massive tax package aims to stimulate business, as well as tariffs, meant to protect them. He blamed technology and globalization for jobs losses. Recent history of consolidations has played a much larger part. Banking for example, where regional banks have been replaced by larger rivals. There were 4,938 commercial banks end of 2017. In 1984, there were 14,400.
With those banks have gone local branches, well paid jobs and also the social capital that comes with local banking teams that live in communities they service, lend to and interact with. Replaced they are, by low-wage jobs from large companies such Wal-Mart and Amazon.