Sure, you just got done talking about it there, but maybe if you wouldn't mind sharing your thoughts on that again, that big number for August?
Yeah, it's really astonishing. You know, I'll state here that Bloomberg has a survey that's very useful, like what's the number going to be to help financial market guys plan ahead. And they surveyed 77 people and said, "What's the number going to be?" And this number was way above any of their forecasts. So it beat the forecast of 77 economists at Bloomberg, and by a lot, and was four standard deviations above the average of their forecasts. So it's really one of the biggest blowout, skyrocketing job numbers that we've seen in a long time.
And I think that if you put it in perspective, what it means now after this report that President Trump's economy, his policies have created now over a million jobs. So we went over the million-job mark because of this report. And if you go down into the details, you can see why. People, because of the tariffs, are onshoring production. We have almost 90,000 people building factories right now, which is an unheard of number. And so there's just lots and lots of good news in this report.
But the good news is not just about this report. It's also true that if you look at all the other indicators, Atlanta Fed GDPNow says the third quarter growth is going to be about 5%. And so this is just, you know, Trump's policies are working, and it's very visible in the data. And I would add, I'm not a politician, I'm just an economist, but the GDP report that's going to show the American people how strong the economic growth is comes out the week before the next election.
Kevin, is this a strong message that the Republicans can take at the start of the campaign for the midterms over Labor Day weekend? This is the traditional starting point.
It's a strong economic message that they can take out, something that the president has been talking about for a number of months.
Right. So it's a Labor Day weekend present to the American people that the president's economic policies are working. Not only are people getting jobs, but if you look at average weekly earnings—which is because people not only want to have a high wage, but they also want to have the hours that they want—average weekly earnings are soaring, and inflation is even under control. If you look at the last three months, core CPI, the core Consumer Price Index at an annual rate, is only at 1.6%. So, we think that while there's a strong growth effect going on, it's not inflationary.
So, why are people not feeling it? Because everyone that we speak to say prices are higher, life's a bit harder, and it costs us more to do the basic things. If the economy's so good, why is no one feeling the benefit?
I just don't accept that fact that no one's feeling the benefit. 90,000 people that have jobs now building factories, they're feeling the benefit. The people that are seeing their salaries go up so far this year flat 4%, they're feeling the benefit. And surveys sometimes don't catch up with the sentiment of the American people and tend very often to favor Democrats. Right now, if you look at, for example, the Michigan survey, they actually tell you the party affiliation of the people who are being surveyed. And for Democrats, they say the economy is worse than it's been since the Great Depression, which is just crazy. And Republicans say that it's great. And so, when you take the average of that, then it looks like consumer sentiment is bad, but it's just that Democrats are very angry as a party about President Trump's success.
With 60,000 jobs added, does the Fed still have a reason to hike interest rates?
Or to raise rates is what people think is on the table. The odds of that right now are about 60%. We respect the independence of the Fed, but I think that it's been underreported something that Chairman Powell's just been saying and emphasizing, and just did so again at Jackson Hole, that growth doesn't require the Fed to raise rates. It's inflation that they need to really keep their eye on. And so, you need to know where the growth comes from. If the growth comes from a big positive supply-side effect, like we're building factories, we've got AI making everybody more productive, then that growth could happen without creating inflation.
And again, right now, the latest read we have on growth is almost 5% growth. The latest read we have on jobs is one of the best jobs days ever right before Labor Day. And the last three months of inflation, our estimate is that it's running at a rate below the Fed's target. It's running at a rate about 1.6%.
As an economist and not a political position, do you think this puts pressure on the Fed then to lower interest rates when they meet in a couple weeks?
I think the Fed will decide what the right thing to do is. And as Chairman Powell said in Jackson Hole, he's going to keep a close eye on inflation. And we're getting a very impactful, ahead of their meeting, Consumer Price Index report next week.
Sir, in the back. I have to be in the back. I'm sorry.
I know. I was just finishing.
