White House economic adviser Larry Kudlow said significant wage gains for low-income workers under President Donald Trump is an economic “booster rocket” to push the seemingly endless bull stock market even higher and fuel robust growth.
“You look at the numbers, the bottom 50 percent has had a 47 percent increase in their net wealth between home prices and share prices,” Kudlow said at the World Economic Forum in Davos, Switzerland on Wednesday.
“And that is a booster rocket to this economy. It not only gives them confidence, it gives them some serious spending power,” the veteran financial guru and former Ronald Reagan adviser said.
“The great part about this to me — I’ve been around a while — is when you look inside, look under the hood, in this growth spurt, with 3.5 percent unemployment and virtually no inflation, which itself is a remarkable development, it is the American middle class, it is the American blue-collar, middle class, they have the fastest wage growth,” said Kudlow, who worked as Reagan’s budget deputy between 1981 and 1985.
Pay for the bottom 25 percent of wage earners, who account for 82 percent of the population, rose 4.5 percent in November from the year-ago period, according to recent data published by the Federal Reserve Bank of Atlanta.
Kudlow again predicted that Trump’s economic achievements will spark stronger economic growth.
“The president’s trade deals have inspired a lot of confidence among large and small businesses, and I think it’s going to add at least half a point to GDP this year,” said Kudlow, who served as the Trump campaign's senior economic adviser. “I think we’re going to be moving into the 3 percent zone.”
Chicago Federal Reserve Bank President Charles Evans told CNBC earlier this month that the fundamentals of the U.S. economy are “good” at the moment and the labor market remains strong with the economy set for a gross domestic product growth rate of 2% to 2.25% for 2020, Reuters explained.
Meanwhile, Kudlow also explained that most of the U.S. population is benefitting from the seemingly endless bull run on Wall Street.
“In the stock-market rally, I know it’s commonplace to say it only helps a few rich people,” Kudlow said. “That is just not true.”
Kudlow said that more than half of the households in the U.S. own shares through either a 401(k) or an IRA, an individual retirement account.
However, Pacific Investment Management Co. has warned that U.S. growth is likely to slow in the first half even as the likelihood of recession recedes globally amid reduced trade tensions with China and further accommodation by central banks, Bloomberg reported.
“Just as the U.S. cycle lagged behind the global cycle during 2018 and 2019 with the U.S. economy slowing later and by less than the rest of the world, we expect global growth to trough out and rebound earlier than U.S. growth this year,” Joachim Fels, global economic adviser, and Andrew Balls, chief investment officer for fixed income, wrote in an outlook earlier this month.
Pimco warned investors to expect real U.S. gross domestic product growth to slow to 1.5%-2% in 2020, from about 2.3% in 2019, with most of the gains coming in the second half.
Political uncertainty surrounding the U.S. elections could hold back “animal spirits” if progressive high-tax, high-regulation Democrats seize momentum.
© 2026 Newsmax Finance. All rights reserved.