June’s jobs report is a one-off following several months of very strong jobs days, and it doesn’t reflect the state of the underlying economy.
Only 57,000 jobs were created last month, while the unemployment rate fell to 4.2%, and the labor force participation rate fell to 61.5%. The job creation in previous months was also revised downward.
June’s jobs market was dealing with temporarily elevated gas prices and transient inflation due to the war in Iran, which is now ending. As oil prices and gas prices fall, Americans will have more disposable income to create jobs. The price of a barrel of oil is already back to its pre-war average.
The falling labor force participation rate will also reverse as Republican welfare work requirements take effect. So far, Montana, Nebraska, and Georgia have implemented Medicaid work requirements, with other states following suit by 2027. A Towson University study estimates Medicaid work requirements will boost labor force participation by a massive 1.2 percentage points, bringing the rate back to the heady days of the first Trump administration.
Today’s jobs report should take potential Federal Reserve interest rate hikes fully off the table, especially as inflation falls. Commentators calling for rate hikes are looking through the rearview mirror, while Federal Reserve Chairman Kevin Warsh is looking through the dashboard.
July 4 marks not only the nation’s 250th anniversary but also the first anniversary of the Republicans’ Working Families Tax Cut. Its pro-growth provisions will boost the economy and labor market to new heights in the months ahead, now that war and inflation are ending.
The mainstream media has tried to bury its benefits to prevent Donald Trump from getting a win, so they’re worth repeating. It prevented $4.5 trillion in tax increases — the biggest in American history. It locks in the doubled standard deduction, lower tax brackets, and the 20% Main Street tax deduction used by 26 million American small businesses. It restores and makes permanent 100% immediate expensing for capital investments and research and development.
Every Democrat in Congress voted against this law and to raise taxes on small businesses and ordinary Americans. Make no mistake: If Democrats retake the House, especially with their new socialist vanguard, they will prioritize legislation to reverse these tax cuts. They will claim they are raising taxes on “the rich,” but small businesses and ordinary Americans will get caught in the crosshairs (as always).
In contrast to Democrats’ claims at the time, federal tax revenue has increased significantly since the tax cuts were enacted due to their pro-growth elements. The Laffer Curve is real!
Since the tax cuts were passed, monthly small business creation has risen by about 20% to record levels. A Wall Street Journal report this week reveals the nation minted an incredible 1,200 millionaires a day last year.
According to JCN polling, 70% of small businesses plan to expand, hire, raise wages, and reinvest in their communities due to these tax cuts. While some of these investments have been put on pause to contend with high energy prices and inflation, many entrepreneurs will break ground in the second half of this year as these headwinds ease.
Americans have much to celebrate on the nation’s 250th anniversary. The nation’s opportunity economy, buoyed by tax cuts and free-market policies that empower small businesses, should be at the top of this list.
Alfredo Ortiz is CEO of Job Creators Network, author of “The Real Race Revolutionaries,” and co-host of the Main Street Matters podcast.
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