Growth—which is good for business and the economy—is going well, with the last couple quarters at 3.8% or better. How much the shutdown damaged GDP, no one knows yet. The Atlanta Fed GDP tracker has backed off to 3.5%, but government data hasn’t caught up. Two P-words are key here: progress and patience.
The media makes it sound like the economy is in terrible shape, because President Donald Trump promised to fix things and he hasn’t fixed everything yet. Patience is in short supply. People have been hammered by President Joe Biden and Democrats’ worst inflation since the 1980s. Most benefits from the One Big Beautiful Bill Act won’t kick in until 2026. The estimates of people’s federal tax refunds vary between $150-170 billion. That will perk some folks up, maybe trigger a steak dinner celebration.
In Biden’s four years, the average household lost $3,000 in buying power. In 9 months’ time during Trump’s second term, households have gained $1,200 back so far. By May 2026, we will have a new Fed chairman, new Federal Open Market Committee members and better chances of further rate cuts. Critically, it is very certain whomever Trump picks will overhaul the Federal Reserve. That means a new governing philosophy—growth in the economy is a good thing—Ph.D. economist deadwood removal, radically changed economic models (no more Keynesian theory) and maybe new authorizing legislation that reflects supply-side economic approaches, focusing on price stability and growth to fight inflation instead of throttling demand.
As mentioned above, GDP for the second quarter, Trump’s first full quarter, was 3.8%. The third quarter was at the same clip until the Schumer shutdown. Capital expenditures for September—last data—was 0.7%, totaling nearly 10% for 8 months; retail spending over Black Friday and Cyber Monday set all-time records; inflation has remained at about 2.8%; and import prices were up 0.3%. Key: wages for the year are up 5%, inflation 2.8%. That compares to 5.5% annually under Biden, cumulatively 20%. In fact, the increase in prices people are complaining about happened nearly 90% under Biden, according to economist Steve Moore.
The Democrats’ Corporate Average Fuel Economy (CAFE) standards made pickups proportionately more expensive for farmers, ranchers and construction companies. But when the Democrats’ Environmental Protection Agency (EPA) usurped Congress and increased standards to nearly impossible standards, it became obvious that the goal was to eliminate gasoline-powered vehicles.
Trump’s EPA has removed that impediment, rolling back the CAFE standards, in addition to having already gotten rid of the electric vehicle subsidies and mandates. The labor market is in transition. A couple million illegals have self-deported, and many criminal illegals were deported. The jobs statistics have shown increased hiring of native-born Americans and decreasing numbers of foreign-born workers. There are fewer government jobs and more full-time jobs, as opposed to more government jobs and lots of part-time jobs under Biden. The new factories being built now haven’t hired yet. Jobless claims have averaged lowest since 2022.
Agriculture Secretary Brooke Rollins is concentrating more on input costs for producers presently. Retail beef prices are up now and grain exports are really up to U.S. Trade Representative Jamieson Greer. Greer reminded the recent cabinet meeting that Trump’s team is changing 70 years of America’s totally open system for countries exporting into our market. Trump’s tariffs have gotten countries to lower their tariffs and increased access. China is still the tough nut. Now we have had reciprocal, more balanced trade where everyone is treated more fairly, a good thing for the long run, Greer said.
There is one Mexican feedlot near Nuevo León, Mexico, that needs to tighten up procurement. A case of New World screwworm (NWS) was discovered on Dec. 3 at the same feedlot of an October discovery. That’s 120 miles south of the Texas border. It was a 22-month-old animal brought in from the very south of Mexico, Veracruz, about 740 miles south of the border. There has been little from USDA about opening the border. No president or Ag secretary wants to be blamed for letting the NSW get into the country. There will have to be evidence that Mexico is getting a handle on the problem before cattlemen on this side of the border get more feeder cattle.
One of the things that drove inflation during the Biden years was high fuel costs, because that affects manufacturing, transportation, crop and livestock production, home heating and cooling and the cost of filling up the car. Trump’s drilling encouragement, deregulation and the oil patch’s efficiency at putting out record amounts of oil are paying off already. I just paid $2.17 a gallon for regular 85 octane fuel in Colorado. — Steve Dittmer, WLJ columnist
(Steve Dittmer is the author of the Agribusiness Freedom Foundation newsletter. Views in the column do not necessarily represent the views or opinions of WLJ or its editorial staff.)
