‘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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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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