The Green Shoots of Trump’s Hamiltonian Economy
Scott Bessent warned from the beginning that Donald Trump’s economic program would take time to appear in the data. An economy conditioned to reward consumption over production, public borrowing over capital formation, and foreign supply chains over domestic capacity cannot be remade in a quarter.
But policy works with a lag. That lag is beginning to close. We are starting to see green shoots.
At an economic turn, economists follow the household survey. It often shows first whether Americans are finding work, re-entering the labor force or retreating from it. September’s report was solid: household employment rose by 406,000, the labor force expanded by 485,000, and participation climbed to 61.8 percent, its highest level since May. Hours worked also increased.
These are not recessionary signs. They point to a broader expansion of productive capacity.
Wage growth was 3% year over year, while productivity has improved. Business-sector productivity rose 2.2 percent over the year through the second quarter. Manufacturing productivity advanced at a 2.4 percent annualized rate, while unit labor costs fell 0.3 percent. That is the combination policymakers should want: more output per worker, lower unit costs and room for real wages to rise without an inflationary spiral. Attention Phillip Curve lovers.
The Trump program is not simply tax-cut economics. It is a supply-side strategy with national purpose: lower regulatory barriers, expand domestic energy, reward capital formation, rebuild strategic supply chains and make building in America more attractive than offshoring.
The objective is not merely a better quarterly GDP print. It is more energy, housing, equipment, factories, data centers, critical technology and domestic industrial.
The growth in Manufacturing employment is real. The US economy is turning.
That change should eventually show up in corporate profits. My estimate is that S&P 500 operating earnings can reach $450 per share in 2027, as AI investment, reshoring, energy abundance and productivity lift the corporate earnings base.
The inflation evidence is equally important. The Dallas Fed’s trimmed-mean PCE rose at only a 1.92% annualized rate in August, consistent with underlying inflation near the Fed’s target. The danger is that Wall Street Keynesians, Bond Vigilantes and a Federal Reserve trained to see growth as excess demand misread a supply-side expansion as inflation and choke it off.
The green shoots are appearing. Trump’s wager is that America can grow not by borrowing and consuming more, but by producing more.