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January 18, 2018


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HOW IS TRUMP's ECONOMY? As I am sure you are beginning to feel the atmosphere of confidence is growing day by day in American businesses and consumers. This confidence has buoyed the stock market and is beginning to add to the consumer’s willingness to spend. The lower price of oil and gasoline is beginning to show up as more money in consumer’s pockets and in lower costs to American businesses. The result now is that revenues of businesses, so stagnant for the past 8 years, are now growing. That is combining with lower expenses to create more profits. Technology is playing a huge role as well.

Baby boomers are retiring at nearly 10,000 per day. This has been allowing American companies to financially engineer as they reduce the number of high paying jobs in their company by promoting lower paid workers as well as using technology to supplement the workforce. But, as the unemployment rate declined the pool of experienced, talented people has been drained. Now, real competition for talent is beginning to show up and wages will increase beginning in the critical needs positions. Baby boomers represent the most experienced portion of the employment pool and they have delayed retiring as long as they could. The stock market refilled their drained IRA and 401k accounts. The retirements will accelerate, fueled as well by rising home prices. This will push employers to compete more and more for high performance talent. One of our business leaders many years ago predicted that this would happen. Unfortunately he did not foresee the 8 year downswing that we went through to get here. I believe now that 2018 budgets are being approved and new 2018 contracts are being signed for purchases managers will begin to hire and competition in the next few years will drive wages higher.

We are already seeing the devastating toll that the past 9 years have had on the development of the young grads into productive members of the work force. In many industries there is a gap of experienced workers with 2-8 years of experience. This will take years to overcome. But, at least now the economy has believers and believers solve problems. Step one: create a positive mood in the country's business leaders has been well done by Trump. Fewer and fewer business leaders are castigating him now.

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