Economic Stats

We do know how to have fun around here -- let's look at some economic statistics!

Larry Kudlow has a guest editorial in the Wall Street Journal today. He thinks that the President should be running on the good economy. The co-host of the best show on TV points out:

• Inflation-adjusted consumer spending is up 3.6%.

• Residential housing investment is up 13.2%.

• Capital-goods investment by businesses is up 13.9%.

• Spending on machine tools for heavy-industry manufacturing is up a whopping 54.2%.

• Exports and imports are up nearly 11%.

• After-tax corporate profits are up 19.5%.

• Industrial production is up 5.2%.

• High-tech production is up 23.7%.

• Productivity has reached an astonishing 4.6% rate.

• Household wealth is up 11.1%, hitting a record high of $45.9 trillion.

• The GDP deflator is up only 2.2%.

• The core consumer-spending deflator (excluding food and energy) is up only 1.4%.

• Interest rates are at 45-year lows, with short-term rates at less than 2%.

• 15-year mortgage rates are just above 5%.

• Home ownership stands at a record 69.2%.

Senator Kerry has been successful pointing to a weaker than anticipated jobs growth number in the payroll survey, but that misses all the start-ups, eBay-ers, and private contractors.

Team Kerry has flogged George W. Bush with the fact that payrolls have fallen (by 585,000) since the beginning of the president's term. Kerryites talk of a "Hoover" economy, even though two million payroll jobs have been recovered in the past 13 months.

In his own defense, Mr. Bush should highlight the household survey (the number of people actually working), which shows that 1.69 million more are employed today than when he took office. An additional 3.4 million have gone to work since the end of the recession, with 140 million Americans currently employed -- a new record. With all these new job entrants, the unemployment rate has dropped to 5.4%. This is no Hoover economy. But to make this point, Mr. Bush must use numbers on GDP and household employment. He must also stress personal income -- the best gauge of family spending power -- which is growing at a 5% pace.

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Punishing successful earners and investors, as Mr. Kerry would do, is no way to grow an economy. Tax hikes on dividends and capital gains are nothing but tax hikes on the whole stock market and the 50% of households that own shares. And what good will it do to set up tax barriers for those who wish to climb the ladder to $200,000 salaries ($146,000 for single earners)? Mr. Kerry may say he likes jobs, but he doesn't seem to like the businesses that create them. By taxing capital investment more, business financing will shrink, as will the jobs that businesses create. (Who's the Hoover candidate now?) Mr. Bush will find that a few well-placed facts will go a long way in tonight's debate.

Posted by jk at October 13, 2004 10:40 AM