It's really astonishing 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. And 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 market because of this report. And if you go down into the details, you can see why. It's 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 economic growth is comes out the week before the next election.
Kevin, it's a strong message that the Republican could 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 and 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.
Are people not feeling it? Why does everyone that we speak to say prices are higher, life's a bit harder, and costs have to do the basic things? If the economy is 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 by 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. And so 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 like 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 262,000 jobs added, does the Fed still have a reason to cut interest rates?
Or to raise rates is what people think is on the table. The odds of that right now about 60%. We respect the independence of the Fed, but I think that it's been underreported something that Chairman Powell has 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 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 jobs is one of the best jobs days ever right before Labor Day. And the last three months over 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 politician, do you think this puts pressure on the Fed then to lower interest rates?
I think the Fed will decide what the right thing to do is. And that 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 middle of— I mean I got you. I'm sorry.
Oh no, I was still finishing.
In addition to the very positive number in the jobs report, there's also a headline about diesel prices being very high as well. What do you tell truckers and everyone else who relies on diesel gas to fuel their equipment?
Yeah, the prices of refined products are still high. We are doing everything we can to get those down. We're mindful of the fact that on Labor Day weekend, having high gas prices is something that people are going to be rightly anxious and upset about. But I can say that our policies have done everything we can to mitigate the harm to energy markets from making sure the Iranians don't blow us all up with nuclear weapons, and that we're making great progress on tracking the oil through the straits, the oil through the Red Sea every day, and the Navy's doing an amazing job to reduce those problems. But overall, don't forget that what people care about is what they spend for everything. And the Consumer Price Index, which includes energy, that Consumer Price Index is showing a big, big decline in overall inflation. So while gas is up, there's so many other things that are down.
