‘THE TRUMP EFFECT’: JOB GROWTH IN MAY SURPASSES STOCK MARKET EXPECTATIONS

WASHINGTON, D.C. — President Donald Trump’s campaign promise to “make America great again” certainly seems to be one he’s keeping, at least when it comes to jobs.

According to the May National Jobs Report by ADP (http://adpemploymentreport.com/2017/May/NER/NER-May-2017.aspx), the private sector added 253,000 jobs last month, nearly Wall Street’s expectation of 185,000 jobs.

“Job growth is rip-roaring,” Mark Zandi, chief economist of Moody’s Analytics, said in a statement. “The current pace of job growth is nearly three times the rate necessary to absorb growth in the labor force. Increasingly, businesses’ number one challenge will be a shortage of labor.”

Service jobs led the way adding 205,000 new jobs, with professional and business services contributing 88,000 — its best month in about three years — and education and health services added 54,000 more.

To put the totals in context, it was the fourth time this year and the sixth time in the last seven months that the ADP count put total job creation above 200,000, a phenomenon that industry analysts have dubbed “the Trump effect”.

The stock market was quick to respond as the market pushed into record territory on Thursday in light of the report.

As reported by Marketwatch (http://www.marketwatch.com/story/us-stocks-on-track-to-edge-higher-rebounding-from-two-day-dip-2017-06-01), the S&P 500 index SPX, +0.56% gained 13 points, or 0.6%, to 2,425, trading near its intraday record of 2,426.08. The Dow Jones Industrial Average DJIA, +0.47% rose 112 points, or 0.5%, to 21,120, near its high of the session. The Nasdaq Composite Index COMP, +0.60% climbed 31 points, or 0.5%, to 6,229, hovering around its intraday all-time high of 6,233.42.

“I can’t predict the future but this is not a bad environment we are in. The Fed is going to raise rates but they are going to do it in a way to encourage growth. Earnings expectations are rising and the economy is rising,” John Manley, chief equity strategist at Wells Fargo Funds told the financial news agency.

The Bureau of Labor Statistics is expected to release its own report on job numbers this Friday. It’s numbers are expected to mirror those of the ADP report.

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WHITE HOUSE DEFENDS TRUMP BUDGET PLAN AMID SLAMS FROM THE LEFT

WASHINGTON, D.C. — The White House on Tuesday stepped up their defense of the president’s newly unveiled budget plan amid attacks from Democrats that the plan will hurt the nation’s poor.

Democrats say the $4.1 trillion budget proposal, titled “A New Foundation for American Greatness,” cuts too deeply into programs such as welfare and disability funding and will result in undue suffering for America’s needy.

However, White House budget Director Mick Mulvaney told reporters that Trump’s plan (https://www.govinfo.gov/content/pkg/BUDGET-2018-BUD/pdf/BUDGET-2018-BUD.pdf) boosts military and border security spending and reflects Trump’s campaign promises “put on paper.”

“There’s not a single thing [cut] from Social Security or Medicare,” Mulvaney said during a press conference at the White House. “Why? Because that’s what he promised.”

When challenged on what impact the budget plan will have on funding for Medicaid and food stamp programs, Mulvaney said Republicans see the budget opportunity with a different set of eyes than Democrats.

“We look at spending differently,” said Mulvaney. “We are no longer going to measure compassion by the number of programs or the number of people on those programs, but the number of people we help get off of those programs.”

Mulvaney said the budget plan is based on the prospect of “sustained, 3% economic growth” and that every aspect of the economic plan is based on that forecast.

“Everything that we do in this administration, every single time I am called into the Oval Office … the focus is sustained 3% economic growth,” he said, arguing that the president and his administration “reject(s) that pessimism” that the economy can’t sustain that amount of growth each year.

The budget proposal was sent to Congress on Tuesday, but even before the plan was released, Democrats had come out swinging against it.

“Eliminating domestic programs is unconscionable,” said New York Rep. Joe Crowley, who as leader of the House Democratic Caucus says he and his colleagues will use the “terrible” plan to regain majority in 2018.

Senate Minority Leader Chuck Schumer was also quick to lay into the plan.

“The Trump budget takes a sledgehammer to the middle class and the working poor, lavishes tax breaks on the wealthy and imagines all of the deficit problems away with fantasy math,” Schumer said Tuesday on the Senate floor.

But by an overwhelming margin, Republicans praised Trump’s economic plan as a new fiscal day in America.

“We can finally turn the page on the Obama era of bloated budgets that never balance,” House Speaker Paul Ryan, R-Wis., said of the proposed budget. “President Trump has proven his commitment to fiscal responsibility with a budget that … prioritizes American taxpayers over bureaucrats in Washington.”

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THE ART OF THE DEAL: TRUMP ANNOUNCES PLANS TO RENEGOTIATE NAFTA

WASHINGTON, D.C. — Despite the controversies surrounding the White House this week, president Trump says he plans on sticking to business as usual when it comes to making America great again and that includes, he says, renegotiating NAFTA.

Following up on his campaign promise to do so, the president notified Congress on Thursday that he intends to enter into renegotiation with Mexico and Canada on the terms of the North American Free Trade Agreement.

Speaking on the president’s behalf, newly confirmed United States trade representative Robert Lighthizer notified congressional leaders courtesy a two page memo that the president intends to overhaul the 23-year-old contract, which Trump referred to as “the worst trade deal ever.”

“We are going to give renegotiation a good strong shot,” Lighthizer said in the letter. But the representative refused to comment on whether or not the president would pull out of NAFTA all together should his desired terms and conditions not be met.

“Since the signing of NAFTA, we have seen our manufacturing industry decimated, factories shuttered, and countless workers left jobless,” Commerce Secretary Wilbur Ross said in a statement. “President Trump is going to change that.”

In response to the announcement, both Mexico and Canada indicated that they would welcome the opportunity to renegotiate the agreement if it meant that the pact, which was entered into by then president Bill Clinton in 1994, could benefit all nations involved.

“We look forward to working with the administration to strengthen the agreement in a seamless way and ensure that we retain the current benefits for American workers, farmers and businesses,” Texas Republican Rep. Kevin Brady, chairman of the House Ways and Means Committee, said in a statement.

Since the agreement was entered into, American farmers have primarily benefited from the reduction in trade barriers. But critics say the pact encouraged American manufacturers to relocate some operations to Mexico to take advantage of cheaper labor, resulting in the loss of much needed U.S. manufacturing jobs.

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MAKING THE ECONOMY GREAT AGAIN: TRUMP ADMINISTRATION SET TO UNVEIL ‘BIGGEST TAX CUT’ IN HISTORY

WASHINGTON, D.C. — The Trump administration on Wednesday is expected to release details on what Treasury Secretary Steve Mnuchin called “the biggest tax cut” in US history, according to a White House spokesperson.

The plan is expected to include huge tax cuts for businesses and a significant tax burden reduction for the middle class.

“It’s a great plan,” said the president during a briefing at the White House. “It’s going to put people back to work.”

Speaking at an event sponsored by The Hill on Wednesday, Mnuchin said Trump’s plan would include reducing the current corporate tax rate of 35% down to 15%, a whopping 20% cut.

”What this is not going to be is a loophole to let rich people cash in,” said Mnuchin. “The 15 percent corporate rate was always non-negotiable for the president.”

For the middle class, the proposed plan involves dropping the existing seven income-tax rates to just three and cutting the individual top rate from 39.6% down to 35. The plan also calls for the ending of the a 3.8 % net investment income tax that applies to individuals earning more than $200,000 a year, repealing of the alternative minimum tax and elimination of the estate tax, which currently applies to estates worth more than $5.49 million for individuals and $10.98 million for couples.

On the flip side, the plan would eliminate the federal income-tax deductions that are currently allowed for state and local taxes — a provision which critics say would hit high salary earners in mega-tax states such as New York and New Jersey. Itemized deductions such as home mortgage interest and charitable contributions will still be deductible under the plan, however, and will have little to no impact on the middle class.

Trump’s proposed tax plan comes just three days before his highly touted 100th day in office, which is traditionally used as marker for measuring a new president’s performance.

In a statement on Wednesday, National Economic Council Director Gary Cohn described the proposal as “The most significant tax reform legislation since 1986 and one of the biggest tax cuts in American history.”

When challenged on how the president plans to fund the tax cuts, Cohn said the jobs created by industries who are able to hire more employees as a result of the tax breaks would likely stimulate enough economic growth to cover the cost.

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