Morning Wire

America’s Blue Collar Boom & Manufacturing Renaissance

38 snips
Jul 27, 2025
Joe Lavorgna, Counselor to the Treasury Secretary, discusses the current surge in U.S. business investment resembling the tech boom of the late 90s. He highlights the impact of recent legislative changes that are fostering a manufacturing renaissance through improved tax incentives. Lavorgna examines the unexpected stability in tariff-sensitive goods amidst inflation concerns. He also shares insights on the mixed signals in the economy, emphasizing strong capital expenditures despite a decline in manufacturing and the potential for recovery as interest rates shift.
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INSIGHT

Rapid Business Equipment Growth

  • Business equipment production surged approximately 17% annualized in the first two quarters, the fastest since the 1997 tech boom outside the pandemic period.
  • This growth signals a strong capital expenditure comeback sparked by pro-growth policies and the 'one big beautiful bill'.
INSIGHT

Beyond the Big Bill Growth Drivers

  • Factors beyond the bill include faster permitting, energy production access, and permanent low tax rates boosting capital spending.
  • This leads to U.S. reindustrialization and a manufacturing renaissance, described as a golden era by President Trump.
INSIGHT

Tariffs Not Driving Inflation

  • Tariff-sensitive goods prices have not increased as feared, showing little inflation from China according to PPI and import price data.
  • Inflation likely won't accelerate significantly from tariffs; inflation remains a monetary phenomenon with expectations declining.
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