|
|
The
views expressed
on this page are soley those of the author and do not
necessarily
represent the views of County News Online
|
 |
Townhall
Can We Please
Have a Rules-Based Policy?
Larry Kudlow
Sep 05, 2015
As stocks endure their worst correction since 2011, and the battle
between Fed doves and hawks rages on over a
quarter-of-a-percentage-point rate liftoff, the much-anticipated August
employment numbers made for a surprisingly mediocre report.
Nonfarm payrolls came in below consensus at 173,000. But private
payrolls increased only 140,000, the smallest gain in five months.
Compared with the average post-1960 recoveries, private-sector jobs are
nearly 6 million below that long-run trend line.
The unemployment rate fell to 5.1 percent. But the labor-force
participation rate remained low at 62.6 percent, as did the 59.4
percent employment-to-population ratio.
The best parts of the report were a rise in average hourly earnings and
a gain in aggregate hours worked. Putting the two together, labor-wage
income over the past year is running about 5 percent, and since there's
no inflation, that will sustain real consumer spending. This is good
news.
But earlier in the week the ISM manufacturing report was soft. And
inside that report, new orders were especially soft. It's a sign that
business-investment spending will remain the weakest part of the
economic recovery.
I will make my usual plea: Can we please slash the corporate tax rate
from 40 percent to 15 percent, allow full expensing of investment, stop
the double tax on multi-national profits, and be sure the
small-business S Corps can pay the new lower rate? A deep corporate tax
cut would be the single most stimulative policy measure. It would turn
a 2.5 percent economy into a 4-plus percent economy.
But back to the Fed. What are they going to do? No one knows. If it
were up to me, they would do nothing...
Read the rest of the article at Townhall
|
|
|
|
