yeah back to the January jobs report and
bring in White House economist Larry
Kudlow I want to see a smile Larry I'm
not seeing it yet there you go okay go
ahead take your victory lap because I
think that was a terrific jobs report
yeah it's a blow right number there blow
out number 225 and by the way the
household survey which is heavily
weighted towards smaller business was up
four hundred and eighteen thousand and
still I want to couple this we've has a
whole spate of good news for the month
of January is M manufacturing got back
to 50 is M services got back to 60 which
is really a blowout number extremely
strong housing numbers unemployment
claims rock-bottom they may go below
200,000 next few weeks that's a great
leading indicator and of course the
stock market was up about a thousand
points so I just think that the economy
is getting off on the right foot here
in 2020 and you know we got headwinds we
have to worry about the coronavirus I
understand that we have a Boeing problem
but I think we're in very strong
territory right now
I suspect Larry that the stock market
has moved down this morning because with
such a strong report on jobs the Federal
Reserve is not likely to cut rate and I
think a lot of investors were hoping for
a rate cut and I expect to see the
president call for a rate cut from the
Fed your response I don't really have a
response to that the futures market had
been pricing in a Fed Funds rate cut I
wouldn't mind seeing them be a little
bolder that's just my own personal view
but but the key point today is the blue
collar boom continues the president
spoke about this eloquently at his State
of the Union and laid out the whole
issues how lower wage gains are much
faster than the top managers in fact I
had a stat here someplace
production workers I guess the weekly
earnings number production workers
growing at 5% wages that is compensation
five
percent overall about 3% so that
blue-collar bloom low-wage gains were
actually experienced and smaller
narrower income differences and while
the economy is booming and jobs are
booming that is clearly a function that
the president has restructured and
rebuild this economy on the back of tax
cuts and lower regulations and energy
independence and terrific trade deals so
I just think fundamentally the economy
is very sound and we expect more of the
same we seem to be running out of
workers qualified workers for all the
jobs that are available wouldn't it be a
good idea to bring in some more
immigrants at this point immigration
reform or just open up the visa spigot
and bring some more in wouldn't that be
a good idea well we have a strong
immigration reform policy and won't get
through Congress I guess maybe in the
next next term we want to do it on a
merit-based situation rather than just a
family chain based situation and as far
as high-skilled workers are concerned
there may be reforms there but still I'm
still I want to talk about American
workers all right you look at today's
numbers the employment-to-population
ratio I'm just gonna read this out the
employment-to-population ratio went up
again that's the best single measure of
labor market slack or lack of slack it
was up to tens to 61.2% now look the
peak there was way back in December 2006
at 63 3 so if we can get from 61 and
change to 63 and change given the
expansion of the American population
then you've got potentially 6 million
additional Americans and you know a
theme of the president's here has been
all along in Prior administration the
labor force shrunk in the last three
years on president Trump we've added
three and a half million new workers
they've come out of the woodwork so to
speak into the labor force to take job
opportunities and job retraining and
rescaling opportunities that employment
ratio is telling us as we continue to
climb
up on participation we could have as
many as six million additional workers I
do not see a worker shortage I'm all for
the immigration reforms don't get us
wrong we have a very strong package but
I think right now there are a lot more
Americans out there that can come to
work be retrained beery skilled take
advantage of wage gains that are running
in real terms of over three percent yeah
are you a little disappointed with that
with such a tight labor market and a
fast growing economy that's really
expanding shouldn't wages be rising at a
better clip than 3.1 percent annually
well that's not bad I mean know that but
that's not bad at all you have
everything better I think well I don't
know I mean this story's going to
continue to play out bear in mind on an
after-tax after inflation basis
take-home pay has gone up five thousand
dollars in only three years I mean the
prior 16 years that number was flat to
down so I think they're doing very well
hours worked timed average hourly
earnings in today's report shows income
growth or wage growth in the middle
class of over 4% you got a one and a
quarter one and a half percent inflation
rate so you've got very strong real
disposable income I think we're in a
very good shape there and I again this
thing is still evolving there is a lot
of strength we I don't know people say
we're coming to the end of the cycle I
don't see evidence that we're coming to
the end of the cycle and again the
president has said time and time again
he is going to stay with these policies
we are not going socialist we are not
going to have the government run the
entire economy which would shrink gdp by
20 or 30 percent we are not going to
permit government takeover of medicare
which would take off a hundred and
eighty million private health insurance
contracts none of that stuff and judging
from an early primary caucus which
didn't go so well
for the other side of the aisle I don't
know I was a wonderful state a wonderful
state I loved Iowa but gee willikers if
you can't run a caucus for a small state
how you gonna run all these government
programs in the economy I don't get
I knew I'd get a smile out of you at
some point I know and I knew you'd get
that one in talk to him about housing
yeah because I know you've often said
that housing is that he's going to give
us the next leg up for the economy it's
about is poised for real growth in the
housing market and yet sales of existing
homes still sluggish still around five
and a half million a year it's not
picked up the way I think you were
expecting even though we've got what
three point four percent on 30 or
fixed-rate mortgages what's the problem
with housing well five to have 90 years
not bad
by the way look this too evolves over
time now interestingly in today's jobs
report construction which includes both
residential and commercial was up 44,000
that's a very big number and all these
indicators new housing starts that's the
construction number new and existing
home sales together you look over the
last three four or five months we're in
a kind of mini boom situation prices are
firming up and you know people the two
biggest assets stocks and homes that's
what folks own ordinary middle income
folks blue collar boom type folks as we
call it they have benefited enormous ly
from the stock market rise and the rise
in home prices the recovery and home
prices so that their consumer household
net worth gains have been I think forty
seven percent whereas the top one
percent only got a 13 percent gain I
want everyone I want a rising tide to
lifts all boats but I'm just saying
these increases in asset prices and
consumer wealth are very hard as strong
harbingers of a strong economy
particularly particularly on the
consumer side I don't want to end on a
negative but was there anything in
today's report is there anything about
the economy that they that worries you
I'm not worried about the domestic
economy because the policies are
pro-growth supply-side free enterprise
policies by the way President Trump
spoke to President Xi last night by
phone very constructive phone call
POTUS expressed confidence in China's
ability to anything are we going to give
them a sort of reciprocal deal to help
them out with the virus because that
cutting China's on our stuff and it was
okay yeah I mean first of all they've
cut their tariffs by fifty percent
that was not strictly speaking part of
phase one so I thought that was a
terrific gesture also the two leaders
agreed that while the virus may slow
down US exports and Chinese purchases of
US exports it will be made up before the
year is out as you might guess pharma
medical equipment two of the keys that
china wants to purchase right now for
the virus other things around the world
still our brothers in Europe and the
United Kingdom
you know we're hosting the g7 meeting
here in Joon's gonna be up in Camp David
the theme I'm the Sherpa for this thing
and the NEC NSC working together the
theme is going to be global growth -
we're gonna focus all the plenary
sessions with the g7 leaders on global
growth so if you ask me what worries me
I want to see our cousins in Europe and
our great friends and allies in Japan
promote three percent economic growth
let's not just resort to all this money
pump priming how about lowering marginal
tax rates for individuals and
corporations how about G regulating for
businesses and labor markets and so
forth and so on we need the kind of
supply-side fiscal push here to
accommodate the monetary policy so
that's the part that worries me the most
we might be losing a small amount of GDP
because our friends and allies are not
not producing the goods and by-the-by we
have - we the g7 we used to call the
Western alliance we have to show that
free enterprise and market oriented
economies are much better than socialism
yes so we better start delivering our
goods I better start delivering the
goods well what about that phone call
between President Trump and Boris
Johnson the Financial Times says it was
very heated
president Trump had a go at Boris
because of what he was doing with Huawei
could that interrupt the trade deal that
we'd like to see between the two no and
I know there's a lot of adjectives
coming out of that phone call I don't
think that that is exactly true to be
honest with you look we will be working
with our British cousins on 5g we think
we can work with them and show them
options we'd love to do a free trade
agreement by-the-by we had very good
free trade talks yesterday ambassador
light Heiser and the EU trade
commissioner Phil Hogan I saw Hogan
later very constructive trade talks with
the European Union and so we will pursue
all that those are great pro-growth
measures so you know that that stuff is
going to go ahead by the way one last
little little trinket here on 5g you
know talking about the United Kingdom
and so forth yesterday the Federal
Communications Commission my friend
Ajith PI reached a historic deal with
the satellite operators so we can
repurpose 280 megahertz 280 megahertz of
spectrum we will repurpose that
so-called C ban to help 5g and to help
push 5g out into the exurbs and rural
America so this was a gigantic step
forward on the five G story you opened
it with spectacular news on jobs and
closed it with great news on the
satellite deal Larry Kudlow what a
pleasure thanks for being with us