National Economic Council Director Larry Kudlow says “enormous confidence” just one of the many factors driving robust economic growth, which he doesn’t expect to stop anytime soon.
“I'll start with the enormous confidence that you see in the country. That's very important. People are moving, they're working, they're investing. We haven’t had that in a long time,” the veteran financial guru and former Ronald Reagan adviser told Bloomberg Television.
“President Trump is a growth guy and he has launched a boom that nobody thought possible,” he said.
“I think a lot of folks are underestimating the power of lower marginal tax rates, typically on large and small business, and the deregulation program and the energy program that we've gone through and the president's view that business is good," said Kudlow, who worked as Reagan’s budget deputy between 1981 and 1985.
"There's no war against business people. Attitudes have changed and I think that amounts to a lot. We've never really seen this kind of confidence movement before,” said Kudlow, who served as the Trump campaign's senior economic adviser.
"We haven't had good, old-fashioned business investment" in years, Kudlow said. "You could probably go back to the year 2000. So it's been a long time," he said.
"My point is we're in an economic boom. Frankly, most folks thought it was impossible. Frankly, it's happened. So last question. It's a great blessing. Prosperity is a good thing," Kudlow said.
Meanwhile, the robust economic reports continued to roll in as Wall Street advanced on Wednesday and the Dow Jones Industrial Average closed at a record for a second day, after U.S. economic data fueled a rise in Treasury yields, lifting financial stocks.
U.S. services sector activity raced to a 21-year high in September and companies boosted hiring, signs of enduring strength in the economy at the end of the third quarter, Reuters reported.
The upbeat reports on Wednesday likely keep the Federal Reserve on track to raise interest rates again in December. The U.S. central bank increased rates last week for the third time this year. Fed Chairman Jerome Powell said on Tuesday the economy’s outlook was “remarkably positive.”
“The continued strength of the surveys implies that growth is set to remain well above trend,” said Andrew Hunter, a U.S. Economist at Capital Economics in London. “That will keep the Fed raising interest rates steadily in the near term.”
The Institute for Supply Management (ISM) said its non-manufacturing activity index jumped 3.1 points to 61.6 last month, the highest reading since August 1997. A reading above 50 indicates expansion in the sector, which accounts for more than two-thirds of U.S. economic activity.
The ISM’s new orders sub-index for the services sector increased 1.2 points to a reading of 61.6 last month. The survey’s factory employment measure jumped to 62.4 in September from 56.7 in August. This suggests September’s nonfarm payrolls could surprise on the upside when the government publishes its closely watched employment report on Friday.
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