JULY 2021 – CELEBRATING AMERICA!
The Trump Economy is on a roll and the Biden Burst is adding fuel to the fire. Everyone seems to forget that before the COVID-19 pandemic, the U.S. economy was in terrific shape with strong growth, low unemployment, and rising corporate profits. The Trump tax cuts and deregulation efforts created a resumption of what the Wall Street Journal often calls “animal spirits” to pursue capital expenditures and hire more workers. Thanks to the successful vaccination campaign, we are now witnessing the return to that previous momentum.
With $5.6 Trillion dollars of COVID relief funds from the U.S. Government in 2020 and an additional $1.9 Trillion dollars of stimulus from the Biden administration, economic momentum is propelling forward at the fastest rate since the 1980’s. Corporate profits for the first quarter came in 52.5% better than the previous year. GDP estimates for the current second quarter have the economy expanding 10%.
I was in California a few weeks ago to watch a baseball game for my 56th birthday, and the Los Angeles Dodgers announced full capacity for the stadium starting June 15th! (My St. Louis Cardinals lost, but I still enjoyed several Dodger Dogs!) As economic activity returns to normal in places like California and New York, we can all be proud as Americans that we persevered through a very hard 2020.
We are hearing the word “inflation” more these days. We do believe the price increases will be temporary as the economy has to reset itself for supply to meet demand. Having said that, the surge in commodity prices and some of the inflation numbers bear vigilance and some risk management strategies going forward. Please rest assured that we will be paying close attention to inflation, interest rates, and the effect they can have on the economy and the markets going forward.
I had a fun and enthusiastic July 4th celebration this year. The American spirit of hard work and kindness to others can be seen all across our great land over the past 18 months. I hope you and yours enjoyed celebrating the greatness of America as well.
Mike Mazzei, CFP®, MPAS®
MASTER PLANNER ADVANCED STUDIES®
President, Tulsa Wealth Advisors