The latest jobs report, coupled with the significant downward adjustments to the previous two reports, provides the most compelling evidence yet that the Federal Reserve has kept interest rates excessively high for an extended period.
This situation validates President Trump's assertion about "Too Late" Powell.
The primary economic threat has shifted from inflation, which has been effectively tamed by Trump and Congressional Republicans, to the restricted access to credit for small businesses, the primary drivers of job creation.
The Federal Reserve's elevated interest rates have hindered the nation's job creators from capitalizing on the historic tax cuts implemented last month, effectively handicapping their operations.
According to Conservative Daily News, polling conducted by JCN indicates that small businesses intend to leverage the tax cuts, including the reinstated and permanent 100% immediate expensing, to expand and hire. Regrettably, the prohibitive interest rates are obstructing many from doing so.
Gerald Williams, a hot-sauce entrepreneur from California, shared his experience of being rejected by several small to mid-sized banks when seeking a $50,000 loan to expand his business and purchase a commercial kitchen. Similarly, Virginia small business owner Shantell Chambliss expressed her frustration with the loan-seeking process, having failed to secure a $25,000 loan. "The process of looking for a loan has been so frustrating that I have just given up on it," she said.
A Goldman Sachs survey from the previous year revealed that 79% of small business owners found it challenging to access credit, with 28% reporting that the loans they managed to secure came with predatory payment terms.
Fed Chairman Jerome Powell, rather than being data-dependent, has turned into a data denier. He should promptly acknowledge his error and reduce rates to stimulate the Main Street economy. In response, JCN has initiated a petition to advocate for American small businesses and workers, urging the Fed to lower rates at CutTheRateNow.com.
Despite this, the labor market is more robust than the headline figures suggest. Unproductive federal government jobs have declined by 84,000 under the Trump administration (excluding those on paid leave).
Real average annual earnings have risen and exceeded expectations. Furthermore, this income surge does not factor in the substantial increases in workers' take-home pay due to the new tax breaks on tips and overtime that were implemented last month.
The mainstream media has largely overlooked the potential savings hardworking Americans can accrue from these tax breaks, instead focusing on a widely quoted average of approximately $1,700 per year. In reality, many workers will save considerably more.
Here's the breakdown: Tipped workers earning less than $150,000 can deduct $25,000 of tipped income. This means successful tipped workers taxed at the 24% marginal rate can save $6,000 annually. Families earning under $300,000 can also deduct $25,000 of overtime income, potentially saving up to $6,000 per year.
These substantial savings can cover monthly car payments, annual property tax bills, or even groceries. They enable some of the hardest-working Americans to retain more of their earnings to enhance their living standards.
These millions of workers should remember to credit President Trump and Congressional Republicans for their increased funds. Not a single Democrat voted in favor of these tax savings.
Regrettably, the Federal Reserve's actions are at odds with Republican policymakers' efforts to stimulate growth. It's high time to synchronize fiscal and monetary policy to benefit small businesses, workers, and the American economy.
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