LARRY KUDLOW: Trump’s economic boom - the greatest story never told

August jobs are reported up 162,000—about 3x the Wall Street consensus—with additional upward revisions of 55,000 for June and July. The article highlights a larger “actual” job gain of 217,000 and an improvement in the employment-to-population ratio to 59.1% from 58.9%, alongside rising wage income (a 4.3% increase in the proxy via wage gains plus hours). It frames these results as supportive of tax and deregulation measures, arguing the economy’s “boom” is being underreported.

Analysis

This is more of a sentiment accelerator than a durable fundamental update. The market mechanism is that stronger labor data and a pro-growth political narrative can keep the “soft landing / fiscal impulse” trade alive, but it also pushes back on aggressive rate-cut expectations, which is usually a headwind for speculative, story-driven equities like DJT. In other words: any benefit to DJT comes from attention and political salience, not from an obvious earnings or cash-flow channel.

Second-order, the more important cross-asset effect is likely higher front-end yields and a firmer dollar if investors conclude the economy is running hotter than consensus. That would favor banks, domestic cyclicals, and industrials over long-duration growth, while also making it harder for retail-owned momentum names to sustain multiple expansion. For DJT specifically, the move can extend on narrative alone for days, but over 1-3 months the stock remains vulnerable to any shift in the Fed path or a loss of political airtime.

Contrarian view: the consensus may be missing that “good jobs” can still be bad for the most rate-sensitive parts of the tape if it reduces easing odds. The bullish case for DJT is overstated unless there is evidence of improved monetization or a larger user/advertising conversion effect, neither of which is present here. Falsifier: if the next inflation print cools enough to revive cuts, or if Trump-related headlines regain dominance, the narrative premium can persist; otherwise the trade likely fades.

Key Decisions for Investors

• Do not chase DJT on the headline alone; if already long, use any spike to reduce exposure because the move is narrative-driven and vulnerable to higher-yield repricing over the next 1-4 weeks.
• If trading DJT tactically, use a small near-dated call spread rather than outright stock; this keeps upside convexity while limiting premium at risk if the market refocuses on rates or inflation.
• Express the broader macro implication with a long XLI / short TLT pair for the next 1-3 months: stronger labor data should support cyclicals while capping duration multiple expansion.
• Watch for a reversal signal in the next CPI/Fed communication cycle; if 2Y yields break lower and rate-cut odds reprice higher, any speculative bid in DJT could re-accelerate.
• For higher-risk accounts, consider a relative-value short in high-beta, cash-burning names versus DJT only if political attention remains elevated; otherwise the cleaner trade is to avoid directional exposure.