Kudlow celebrates Trump economy's booming job numbers

Channel: Fox Business
Published: 05/03/2019 02:39 PM

National Economic Council Director Larry Kudlow on the April jobs report, U.S. economic growth, former Vice President Joe Biden's comments on the tax reform legislation and the outlook for Federal Reserve policy. FOX Business Network (FBN) is a financial news channel delivering real-time inform...

I think we should bring in the man of the hour. His name is larry national economic council director. I was expecting to see a huge grin on the man's face, but there you go, look larry iii, just just can't i i said this is spectacular. It'S a goldilocks report. You want to add to that. Well, look! It'S another blowout number and you know it follows the 3. 2 percent gdp, which itself was a blowout ...
umber last week. You'Ve got a very strong economy and again i'll say what you and i have talked about: president trump's policies, tax cuts, deregulation, opening energy trade reform, stable, dollar and so forth. He is rebuilding this economy. I heard yourguest talking about productivity, surging, that's hugely important. Maybe we'll get to that. Today'S jobs number reflects that and here's a very key point.

I want to make stewart with 32. 2 % growth and 263 thousand jobs, which continues the strong trend. We have no inflation, virtually no inflation. You have strong growth, strong growth with virtually no inflation. I think the inflation measure for the first quarter was 0. 9 percent yup the year two years about 1. 4. So that's an important point. Very strong growth, very low inflation supply-side policies are working. Can i just bring up what i think is one big negative here: you've got very strong growth, a terrific employment market and yet you've still got an800 billion dollar deficit in this fiscal year. That'S not supposed to happen. Larry strong growth.

You should be bringing that deficit down and it's 800 billion. What do you say well by the way, give me another year or two on the deficit, because i noticed the cbo put out its own estimates, you know, but there they have very low growth assumptions and hence very low revenue assumptions coming from low employment. We don't agree with that. Their models are their models, but our view is three percent growth plus. So look what i'm saying is as a share of gdp. We will cycle down that budget deficit the years ahead and actually i've been following the numberswith. The help of my pal dan clifton and revenues are coming in very strong and so we'll see. I think those deficit numbers will be much better, but the key point here i mean you got a ten year: government bond rate or government note rates. Do that's what two and a half percent that doesn't look? It doesn't look like a deficit panic to me. The main point is economic growth continues strong if you take your productivity, whatever call two-and-a-half percent last four quarters, your growth in employment, at least one percent. It'S actually stronger than that we're now in a three to four percent growth zone and that's a huge change just in a coupleof years again, i would argue because the president's policies on taxes and regulations and so forth are rebuilding the economy. So this is a very, very good story: good growth, low inflation - and i would say this to echo the president periodically says this: i think we can do even better.

In other words, folks are telling me it's going to slow down from here. I don't buy it. I think, as the capital deepening from the business tax cuts continue, you are gon na see stronger growth, more capital, goods, better productivity and continued increases in real wages and jobs. It'S a very good place to be. I i just want to delve into politics for a second larryi know: you're the economics guy, but i just want to talk politics, because we had a speech from joe biden this week producer. I want the second sound bite. Okay, then one that deals with the tax cuts, joe biden says: look you have this whopping great big tax cut most of its gone to the rich into business, and you, america's middle class, are not feeling it you've not seen it. I'Ve just got to roll that soundbite for a second larry. Then i want your comment. Roll the tape, please, but you don't feel it there's two trillion dollar tax cut like last year. Did you feel it did you get anything from it? Of course notof course not. I think you heard that larry.

Would you deal with it? Please! Well, listen all the many times i interviewed joe biden down through the year and another tv show on another network. Heaven forbid, i never was really able. I was never really able to convince him of the merits of the incentive model of growth and why lower marginal tax rates improve growth for everybody. Look! Here'S a fact: it's very important. The strongest growth in jobs has come from the blue-collar sector. It is not the upper end, in fact, the wage increases, the bulk of the wage increases faster wage growth is not the upper end. It'S the blue-collar middle class working folksactually, the the 10 % the 10th percentile has been the leader, not the top one percentile. So i think joe biden's got ta, get his facts right and you might want to re-examine our policies we're getting done. What we hope to get done manufacturing is rebounding all right and if we get these trade deals particularly usmc a which i think is going to be very bullish, freaking omicron investment. We will see continued surge in auto workers, farmers, manufacturing and so forth, and so on. But that's the sweet spot, it's not the upper end. It'S the middle class folks, the working folks, the hard hats, those are the ones i love.

I love the hard hats. So canyou give me a forecast for the rest of this year. Do you think we're gon na get four percent growth in any quarter this year? Do you think we're gon na get an unemployment rate below the current 3. 6 percent rate? At any point, this year, four percent growth below three six unemployment. At any point this year, will you forecast that i will say there are strong probabilities that that may occur? It'S a great scenario: we're gon na call it the varni scenario like this very, very much, i'm a nonpartisan bipartisan kind of guy and whatever you say, is really important. Look all. I want to say again. You'Ve got three point: six percent unemployment, big job gains; 263gdp growth, 3. 2 and still here's the key point: virtual price stability, high growth, high jobs, low unemployment rate, low low inflation, that's the message that we've been trying to send and i think those withe policies, the supply-side Policies to rebuild economy working a lot of these old models from various institutions around washington dc - i would never want to name names - have missed this; they don't believe it. They should because the numbers are bearing that out. So to your scenario, the varni scenario yeah. We could see a 4 % growth rate with less than three point: six percent unemployment - there's no phillips curve going on here.

Growth is good, higher wages are good, more jobs are goodlow, unemployment is good. Working successfully is good. This is a sweet spot. I hope folks take notice. You'Ve got to be disappointed that stephen moore has withdrawn from consideration at the federal reserve board. I, for one, do not understand why a man's personal life in the past should have any influence on his position and his ability to characterize monetary policy. Your comment please well, i did think it's unfortunate. He withdrew because of these personal attacks, which have nothing to do with his excellent record and analysis as an economist and a policy analyst you're right, that's too bad! You know i'll give one thing here: steve moore's view which is coincident with our view, he's winningthe battle of ideas, which is again to suggest the strong economic growth can coexist with low inflation and, in fact, as steve tried to say - and i will echo this - this Is a long-held view of mine and art, laffer and others, and the presidents for that matter? These incentives for low tax rates and deregulation are working they're working. So this is the kind of non-inflationary growth with a stable currency. The dollar money's pouring into the usa from all over the world, so i think steve wins the battle of ideas. He will live to fight another day. Well, do you want the federal reserve to cut rates? The president wants the federal reserve to cut ratesand cut rates.

Now you want to do it well, i think the point is with these low inflation numbers. I think the fed is actually looking at rate cuts. I mean some of which were priced into the market, maybe up until a few days ago. You think that rates after a jobs report like that welllook feds, independent, i'm not gon na - ask guess their timing there to do what they're gon na do on their own time. What i'll say is again using the analysis. What we found is that all these incentives in the economy, creating strong growth and jobs with no inflation and the fed is looking at the inflation numbers and i don't think they're inclinedto fine-tune real gdp. I think they are inclined to think think low inflation might suggest the need for lower interest rates, their target rate. I myself believe that is the case. If president does too, as you noted, so the feds looking at inflation, that's a good way. Our views right now, intellectually, are not really far apart from the federal reserve best i can determine so you have proven right. You were on this program many times in the past and i was a skeptic. Don'T call this the vani scenario, because it's not, i was a skeptic.

I did not think that we could get three percent growth in the first quarter, but you consistently said thatwe could and now you're on the program saying there's a good chance of 4 % growth and below three point: six percent unemployment. At some point in this. In this calendar year, every last word to you every every 10 or 15 years. Do i really get it right every 10 or 15 years? I really do first met you. I remember meeting you in the plaza hotel when in new york city about 1982, when you worked with ronald reagan at treasury - and i remember it distinctly because i've known you ever since well, i was in omb. But yes, oh sorry, i was i was your. I was you and lou dobbs. I was your washington correspondent. Youmade me get up. I think i was on here at 6:30 and you weren't. You got mad as hell at me because i woke you up in the middle of the night. You said you'd never speak to me again and look at this now and lou who's.

An old friend of mine, wouldn't give me any money for that. He said he'd send me a box of cigars, oh okay, sir. It was a pleasure thanks for much for being with us mary crazy on yes, sir thanks very much indeed,.

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