Richardcyoung.com

The Online Home of Author and Investor, Dick Young

  • Home
  • How We Are Different
  • About Us
    • Foundation Principles
    • Contributors
  • Investing
    • You’ve Read The Last Issue of Intelligence Report, Now What?
  • Your Survival Guy
  • The Great Reset
  • COVID-19
  • My Rifles
  • Dividends and Compounding
  • Your Security
  • The Swiss Way
  • Dick Young
  • Debbie Young
  • Key West
  • Paris
  • Dick’s R&B Top 100
  • Liberty & Freedom Map
  • Your Health
  • Ron Paul
  • Bank Credit & Money
  • Dick Young’s Safe America
  • Your Survival Guy’s Super States
  • Critical Race Theory
  • NNT & Cholesterol
  • Work to Make Money/Invest to Save Money

Only Trump’s Pro-Growth Agenda can Save America’s Economy—Again

September 30, 2020 By Richard C. Young

President Donald J. Trump listens as Vice President Mike Pence addresses his remarks during an update on the nation’s COVID-19 Coronavirus testing strategy Monday, Sept. 28, 2020, in the Rose Garden of the White House. (Official White House Photo by Shealah Craighead)

Since America has begun reducing the severity of its COVID-19-shutdown, the country has seen an incredible economic rebound. The tax and regulatory reforms put in place before the shutdown set the stage for rapid recovery.

Today, many areas of the American economy are showing vibrant signs of life. Several measures of economic momentum have nearly returned to their heights of the pre-COVID-19 era.

Manufacturer’s new orders of consumer goods and materials peaked in September 2019 at nearly $138 billion, then sank to around $110 billion in April 2020 during peak-shutdowns. With parts of the country reopening, new orders have risen again to over $136 billion for two consecutive months.

New housing starts are another area of economic activity that has come on strong as Americans change their lifestyles to avoid the shutdowns and riots of the big cities. Housing starts had a near term peak in January of 2020 at 1.536 million, then fell rapidly to only 1.066 million in April. Over the last two months though, housing starts have grown to 1.483 and 1.47 million consecutively. ISM New Orders and construction contracts are two other indicators showing signs of rebound after the shutdowns.

Perhaps most important of all is the resurgence in consumer confidence. The Conference Board’s index of consumer confidence grew faster in September than it has at any point in the last 17 years. The survey also found that more Americans plan to purchase big items like appliances, cars, and homes than did the previous month.

Where Does the Economy Go From Here?

The impressive pace of the rebound has been proportionate to the frightening speed with which the economy crashed in the second quarter. From peak to trough, GDP fell by 10.2%. For comparison, during the 2008/2009 financial crisis, GDP fell by about 4%. And the average peak to trough decline in all recessions (not counting this one) since 1947 is 2.2%.

So while any growth is good growth, even with third quarter GDP likely to increase more than 7% (over 30% at an annualized rate), economic activity will still be at a level commensurate with the worst recessions in the last seven decades.

The low hanging fruit of the recovery has been picked. The bounce back was aided by a massive fiscal and monetary stimulus that is unlikely to be repeated. Trillions of dollars were handed out to millions of consumers and thousands of businesses. This may be the first recession on record where disposable income rose.

The key questions moving forward are, will the growth continue as the stimulus is depleted, and how quickly will the recovery proceed? The good news is, the strength in the housing market looks to have legs and housing has a powerful multiplier effect on economic growth. The savings rate also remains elevated, signaling consumers may have some reserves left in the tank that can make their way into the economy.

The bad news is, the labor market remains a mess. Aside from the extra unemployment benefits and stimulus checks, spending would likely be much lower. Small businesses are failing at an alarming rate, and the leisure and hospitality industry is in shambles. Will these jobs return? If so, when? If not, where will many of these low-skill workers find employment? Amazon only has so many jobs to offer!

The pace of the recovery from here may depend on the outcome of the presidential election. A Biden/Blue-state agenda is much more likely to result in a protracted recovery (or even a double dip) with the type of elevated unemployment situation we see in deep-blue states like New York, Rhode Island, California, New Mexico and Massachusetts. A Trump victory and a continued pro-growth agenda would likely help the economy recover faster than it otherwise might.

If you’re willing to fight for Main Street America, click here to sign up for my free weekly email.

Related Posts

  • Trump Kicks off Pro-Worker, Pro-Income-Growth Agenda
  • Midterms: Trump Working for America
  • The Trump Economy Going Strong
  • Trump Powers America
  • Author
  • Recent Posts
Richard C. Young
Richard C. Young is the editor of Young's World Money Forecast, and a contributing editor to both Richardcyoung.com and Youngresearch.com.
Latest posts by Richard C. Young (see all)
  • Jean-Pierre: Economy “Not Something that We Keep an Eye on Every Day” - May 20, 2022
  • V4 Stands Against North African and Middle Eastern Invasion - May 19, 2022
  • ENERGY FREEDOM ACT: Ted Cruz Introduces Bill for Energy Independence - May 19, 2022

Dick Young’s Must Reads

  • America’s Colleges Have Become Progressive Liberal Rat Holes
  • You May Be Surprised by America’s “Least Woke City”
  • California’s Progressive Liberals Have Created a Monster
  • WAR HAS BEGUN: What Advice Are You Giving Your Loved Ones?
  • A NEW CONTRACT WITH AMERICA: Rick Scott Finally Gives the GOP Something to Run On
  • The Case for Individual Stocks: Now More than Ever
  • What a Way to Make a Living: New Hampshire #1
  • Making America Great Again Is What America Wants
  • The Common Ground of Democracy is Sinking Beneath Americans’ Feet
  • Why Some Kids Won’t Go Back to School, Ever

Our Most Popular Posts

  • Tucker Carlson Interviews My Favorite Florida Farmer
  • What’s Ahead for America During Biden’s Last Years
  • MARKET CHAOS: This May Take Time, Here’s How to Prepare
  • “We Cannot Save Ukraine by Dooming the US Economy.”
  • Baby Formula Gone Missing?
  • BE VIGILANT: The Rats Are Scurrying in These Rough Markets
  • PRICES SOAR: Diesel Shortage Could Cripple America's Economy
  • Biden: A National Disgrace
  • WATCHING YOU: Italy Deploys Stealth Social Credit System
  • BUSTED BUDGETS: Families Can't Afford Democrats' Anti-Energy Regulations

Disclosure

RSS Youngresearch.com

  • Job Market Survival Advice for Graduates and for Those YOU Love
  • BULLWHIPPED? Inventory Overhang Could Slow Growth in Certain Sectors
  • BUY THE DIPS? Can You Catch a Ginsu Knife?
  • MARKET TURNING: Canada’s Housing Market Turmoil
  • “I’ve Been with Richard Young for Over 30 Years Now”
  • All-Powerful Money Managers Voting YOUR Money Targeted by Senate GOP
  • HORDING CASH: Funds Hold the Highest Level of Cash Since 9/11
  • COMMODITY CRUNCH: Will Tesla Buy a Cobalt Mine?
  • Young Americans Fall in Love with Farming, Again
  • Your Survival Guy: “Sell in May, Buy After Labor Day?”

Joe Biden – Malicious, Incompetent, a Wannabe Left Wing Ideologue?

Jean-Pierre: Economy “Not Something that We Keep an Eye on Every Day”

Job Market Survival Advice for Graduates and for Those YOU Love

The Destructive Rise and Fall of BLM

What Would We Do without the Experts?

V4 Stands Against North African and Middle Eastern Invasion

Copyright © 2022 | Terms & Conditions | About Us | Dick Young | Archives