LARRY KUDLOW: Trump’s drill, baby, drill is paying off
Delayed economic reports show strong retail sales, and decent if not spectacular jobs. But the biggest story is the collapse of oil
A lot of numbers came out today, as the government gears up after the shutdown. One of the biggest themes in the jobs report for October and November was the continued restructuring of the economy, where Joe Biden’s big government socialism is coming to an end. And President Trump’s re-privatization continues ahead.
So far this year, federal jobs have fallen by roughly 270,000, while private jobs have increased nearly 700,000. Also related to Trump policies, native-born jobs are up some 2.7 million. While foreign-born jobs are down almost a million.
It was a decent report, not a spectacular one. Unemployment went up, as federal workers searched for jobs. But importantly, wages for middle-class working folks are up about 5% year-on-year. And that’s about twice the current inflation rate.
Sen. Steve Daines, R-Mont., discusses concerns over a possible January government shutdown and the continuing debate over health care on ‘Kudlow.’
But hang on a minute; oil prices are now falling on an almost daily basis. West Texas Crude has dropped from $80 at the beginning of the year to $55 currently. Out there in the oil fields, incentives to drill, baby, drill are producing 13.8M barrels a day. U.S. production is now running ahead of domestic demand. And sure enough, prices are falling.
Gasoline at the pump has dropped under $3 a gallon nationwide. Oklahoma is the cheapest at $2.30. But crazy California is at $4.35. Climate regulations are the difference. But the bigger story is how oil prices permeate every nook and cranny and virtually every price in the economy. Including food and groceries. And hundreds and hundreds of other items. The dramatic decline in oil is going to push all the inflation indexes way down in the months ahead. And that in turn will open the door to significantly lower interest rates.
Mr. Trump has always had a very energy-centric view of inflation. His program to deregulate the economy, while providing important tax incentives to produce and invest, is paying off. So, 5% wages in today’s jobs report, compared to 2% or even less future inflation, gives real wage affordability of 3 big percentage points, probably more than your average working folks ever imagined.