Ken Griffin, the billionaire head of the Citadel Investment empire, recently expressed his amazement at how bravely President Donald Trump must have survived multiple assassination attempts while still playing his A-game for the American people.
Griffin described him as “resilient.”
We can say the same about Trump’s economy.
Yes, there are headwinds: the war in Iran continues to create economic uncertainty.
Prices remain stubbornly high, thanks to steady inflation not helped by Trump’s tariff policies.
Many people work, but finding a new job is not easy.
Artificial Intelligence is bringing about rapid and sometimes disruptive changes across industries.
Current economic growth is decent – at an annual rate of 2% – but nothing noteworthy.
But unless I’m missing something, the stock market continues to reach record highs, fueled by the mother’s milk known as corporate earnings, the ultimate indicator of fundamental economic strength.
Analysts say these profits are also headed toward record levels, and may grow by more than 21% in 2026.
It’s “one of the best earnings seasons in 20 years,” Deutsche Bank’s number analysts said this week.
If history is any guide, such strong earnings and strong balance sheets mean one thing: companies are poised to hire, perhaps dramatically, once the current economic cycle turns.
I know what the naysayers are thinking: It’s different this time.
Artificial intelligence is driving amazing productivity gains by computerizing tasks that were once handled by humans.
Big corporations can continue to make profits, with their stocks rising, without the real economy of ordinary Americans sharing in their prosperity.
Wall Street and corporate America are winning, while Main Street is floundering.
One problem with this argument is that it ignores the reality of the modern American economy: Wall Street and Main Street are more intertwined than ever before.
Ordinary Americans We are Stock investors, through 401k and retirement plans.
Larry Fink, CEO of BlackRock, notes that middle Americans will embrace AI by investing in it, and many are doing so.
Trump’s so-called New Accounts, tax-advantaged investment plans for Americans under 18, are working to ensure that hedge fund traders are not the only beneficiaries of the AI boom, increased profits and the accompanying rise in markets.
Additionally, it’s not just technology-focused companies.
The current corporate profit boom is broad-based: manufacturing, retail and health care are all gaining ground.
They’re exploiting AI, of course, but market strategists like Jason Trennert of Strategas Research say the breadth of the corporate boom is directly linked to Trump’s economic policies.
His big, beautiful bill sparked investment in plant and equipment, and ultimately in the jobs that are bound to come once things stabilize globally.
“If it were not for the war, we would be talking about accelerating the pace of the economy,” he told me.
This is due to the tax benefits that accrue to companies that make these material investments.
Regulatory hurdles are being eliminated.
Consumer spending remains strong because Trump extended the tax rates he cut during his first term.
All of these elements go into profits, and ultimately jobs.
Economic headwinds don’t last forever.
The Iranian conflict will end, and when it does, given all the drilling we’re doing at home, oil prices will fall, and so will the price of a gallon of gas.
Consumers will feel better and spend more, and companies will exploit this feeling through hiring.
While AI will eliminate some jobs, it will create more.
And this is already happening, in fact: Who do you think is building our AI infrastructure?
He’s not an investment banker who rolls up his sleeves, he’s a hardworking guy who earns a decent wage.
The potential for job creation in artificial intelligence – again, if we are to be a guide to the past – will be enormous.
Throughout history, when new technologies eliminate redundant tasks, they open up new employment options.
Remember, Amazon was supposed to destroy small businesses by making retail outlets obsolete — but the opposite happened, as small stores took advantage of its portal to sell stuff.
Despite the current speed bumps, the corporate earnings boom portends a bright future.