LARRY KUDLOW: What’s wrong with 5 percent growth?

What’s wrong with five percent growth? Or more?

To repeat my message in the New Year that the Trump economic boom could produce 5%, 6% or even 7% growth, today there are numbers that are just as strong as I thought. Economists take note: Mr. Trump knows the economy better than you. And what’s wrong with 5 percent or better growth?

The Atlanta Fed’s GDPNow for the fourth quarter, which you remember was the closing quarter, was revised up to 5.4%. At the same time, economic productivity, which is one of the most significant variables, has averaged 4.5% over the last two quarters. That’s output per hour for the non-agricultural economy. Perhaps more most importantly, corporate productivity has increased by 3.8% over the last two quarters. A productivity trend of about 4% therefore opens the door wide for 5% (or more) economic growth.

And again, I want to remind everyone of the biggest story that was never told: the drop in oil prices is a positive oil shock, meaning it’s like a big tax cut for consumers and businesses, in other words, Trump’s deflation replaces Biden’s inflation. And a whiff of oil-induced deflation after almost five years of the covid era, Biden’s inflation is a very big positive for the economy. Democrats are completely frozen and paralyzed by the success of President Trump’s economic policies: supply-side tax cuts, deregulation, « drill, baby, drill » and free and fair trade.

As the numbers come in and Team Trump markets them, the midterm election outlook is looking increasingly rosy for the GOP. Treasurer Scott Bessent speaks At the Minnesota Economic Club (is Minnesota Economic Club an oxymoron?) people were reminded of the wages and productivity and growth benefits of fully expensing factories, equipment and farm structures. Business investment spending is up 12% in the first three quarters of last year, but even he doesn’t seem to be taking advantage of the positives from falling oil prices that are spreading throughout the economy.

There will be negative CPI prints pending. That’s how important energy is. It’s not just gasoline, although it softens. The drop in oil costs affects hundreds of other prices. Initial jobless claims continue to fall by their four-week average, and October’s trade deficit narrowed more than expected.

And here is Mr. Trump and hisdrill, baby, drillCleanse Communism from the Western Hemisphere Consequence of Trump The Monroe Doctrine. And moving the oil power nexus from the Persian Gulf to America, right where it belongs.