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by Rod D. Martin
September 8, 2026
Last month, the Enemedia crowed. The “experts” announced 1.5 percent growth and pronounced judgment. Trump’s promised boom had failed to arrive.
Wrong.
This month, the Atlanta Fed’s GDPNow model has third-quarter real growth running at a 4.7 percent annual rate.
As I told you then, the TDS crowd was looking at the wrong number. In the second quarter report, imports and inventories pulled the number down. But the import surge was led not by toys, trinkets, or flat-screen televisions, but by capital goods: telecommunications equipment, semiconductors, and industrial machinery.
The equipment American companies were importing to build the boom was temporarily concealing it. And right on schedule, those machines are now roaring to life.
Friday’s employment report did more than add 162,000 jobs. It showed the sequence I described last month moving into its next stage. Restaurants and local-government schools supplied much of the headline gain. But manufacturing payrolls rose by 16,000, nearly all of it in durable goods. Machinery and fabricated-metal producers accounted for 6,000 apiece, while construction gained another 22,000 jobs.
Even July’s reported loss of 23,000 jobs did not survive revision. It became a gain of 21,000. Manufacturing employment has now risen by 58,000 since December, while factory production workers are earning 4.4 percent more per hour than they were a year ago.
Indeed, the private sector has added 1.04 million jobs since Trump took office just a year and a half ago.
The industrial boom has begun to hire.
Investment Is Turning Into Production
The latest numbers tell the story. Real final sales to private domestic purchasers — the part of the economy powered by American consumers and private investment — grew at a 4.2 percent annual rate, up from the original 3.9 percent estimate. Equipment investment surged by 13.6 percent after rising 15.8 percent in the first quarter. Excluding the pandemic reopening, America has not seen back-to-back double-digit equipment-investment quarters in more than a decade.
Indeed, capital-goods imports jumped $14.4 billion, more than the entire $12 billion increase in goods imports. Computers, computer accessories, and semiconductors led the way. Yet through July, American exports were up 12 percent from the same period last year and the total trade deficit was down nearly 30 percent.
The private economy wasn’t standing still. It was buying productive capacity.
July’s trade figures show why the same buildout appears to depress GDP before it raises output. GDP subtracts an imported computer server from the trade component before the machine adds anything to American output. The same is true of a German machine tool or a Taiwanese chip-fabrication system. GDP counts where the machine was made when it arrives. Only later does it count what American workers make with it. A new plant necessarily increases construction spending and machinery orders well before the public sees its finished products or new paychecks.
But now that accounting lag is ending.
Core capital-goods shipments rose 1.2 percent in July. Through July, they were 8 percent above the same period last year. Machinery shipments jumped 2.9 percent for the month. The durable-goods backlog rose again to $1.6 trillion. The industrial-machinery figures were even stronger. Through July, orders were 39.5 percent above the same period last year; shipments were up 32.4 percent.
Those shipments are now becoming output. Durable-manufacturing output rose at an 8.9 percent annual rate in the second quarter. The August ISM report extends the pattern. Manufacturing expanded for an eighth straight month after ten months of contraction, and the production index reached 58.3.
The machines did what capital investment is supposed to do: they raised output faster than labor costs. Now the factories using them are adding people.
Inflation has not vanished, but it’s certainly getting better. Second-quarter core PCE inflation slowed from a 4.4 percent annual rate to 3.6 percent while private demand accelerated. Contrary to the Democrats, growth is not inflationary. Production is not the enemy of price stability: it is the means by which supply catches demand.
The Money to Keep Building
Industrial booms require financing, but the best financing is profitability. Profits are the financial capacity that funds capital spending, and Trump’s permanent business expensing contained in the One Big Beautiful Bill is driving growth by increasing the reward for putting that money to work now.
That’s no longer theoretical (it honestly never was). Current-production corporate profits rose 9.1 percent in the second quarter and 22.8 percent from a year earlier. Almost all of the quarterly increase came from domestic business.
Managements are clearly behaving like they expect the strength to last. The Wall Street Journal reports that companies raising current-quarter profit guidance outnumber those cutting it by nearly two to one.
Steve Moore calls this the biggest industrial boom in American history. Over the next quarter-century, he estimates $6 trillion to $7 trillion in AI and data-center investment alone, and two million to three million additional construction jobs. That’s a supercycle by any definition, and it’s just beginning.
Trump’s Plan Was Never Just a Tax Cut
As they do with his foreign policy, the political class keeps analyzing Trump’s economic program one policy at a time. That guarantees they will miss it until it slaps them in the face (and if the 1980s are any indication, they’ll deny it even then).
But the plan is a system. First come the trade agreements and investment commitments. Then land, permits, construction, equipment, workers, and suppliers. Production and exports follow.
Permanent tax cuts and full, immediate business expensing reward companies for building here, now. Treasury Secretary Scott Bessent calls the result a “CapEx boom in factories.” Massive deregulation — 129 regulations cut for every one new rule issued — shortens the time between deciding to build and opening the doors. Abundant energy powers everything. Defense expansion creates long production runs for some of the most advanced manufacturing on Earth.
Tariffs create leverage to open foreign markets, rebalance trade, and redirect supply chains away from China. Access to the world’s richest consumer market is exchanged for purchases, investment, and production inside the United States. And by exempting foreign companies from tariffs if they build plants here, the world is incentivized to create jobs in America and sell to its workers.
All these things helped Trump recruit more than $18 trillion in investment commitments. But Trump also traveled the world to pitch those deals and consistently came home with gold. No President has ever been more hands-on in building American jobs and the American future. And the new equipment and shipment figures show that the spending from those investments has begun.
The inevitability of deindustrialization was a lie. America deindustrialized due to bad policy decisions by both parties. It took draining the swamp to begin to rebuild America’s heartland.
Energy Powers the Supercycle
Energy is the machine underneath the machines.
EIA’s latest finalized data put U.S. crude production at 13.8 million barrels a day in June, after nearly touching 14 million in April. Petroleum exports — crude oil plus petroleum products — set a record 13.61 million barrels a day in April. May nearly matched it, while crude exports alone set a fresh monthly record of 5.73 million.
In 2008, America was “exporting” $700 billion a year to its enemies in exchange for their crude. Oh, how the tables have turned.
Total American energy exports reached a record 31 quadrillion Btu in 2025, while net energy exports rose 20 percent to another record. U.S. LNG shipments to Europe reached a record 10.3 billion cubic feet a day, up from 6.3 billion in 2024. The United States supplied 56 percent of the EU’s LNG imports in 2025, compared with a still-objectionable 13.9 percent from Russia.
All of that reflects simply enormous plant expansion, export income, and jobs. And the supply base is still expanding. EIA puts current peak U.S. natural-gas export capacity at 18.3 billion cubic feet a day. It expects total natural gas exports to grow by another 30 percent by 2027 as new terminals come online. Yet again, demand drives investment; investment builds factories and installs machinery; production and exports follow. That last bit is happening now.
April’s petroleum-export record came after disruption through Hormuz drove up global demand for American barrels. Export capacity can’t prevent a price shock. But supply outside the chokepoint offsets the disruption and keeps factories operating, both at home and abroad. The kind of global energy shock inflicted repeatedly by OPEC in the 1970s simply isn’t possible anymore.
Energy dominance is the foundation beneath the industrial supercycle — and one of America’s most powerful instruments of statecraft.
Defense Abroad Means Jobs At Home
Defense offers the clearest proof of how the process works. Through July, defense-capital-goods shipments were 28.7 percent above the same period last year; orders were up 43.3 percent.
Last month, I told you about Lockheed’s $65 billion in new orders and record $230 billion backlog. But then came the kind of commitment that turns a backlog into factories and jobs. A modification brought Lockheed’s seven-year PAC-3 multiyear agreement to $58.62 billion. Under the new contract, the company will triple PAC-3 capacity by the end of 2030, expanding its Camden, Arkansas plant by 50 percent. Lockheed plans to invest $9 billion through 2030 to modernize more than twenty U.S. facilities.
Previous administrations allowed U.S. shipbuilding to atrophy. But Trump’s on top of that too. Perhaps most striking is the new $76.6 billion award for five Columbia-class ballistic-missile submarines and nine Block VI Virginia-class guided missile submarines. As I explained last month, the long-lead contract matters every bit as much as the submarines themselves. It gives the private yards and their suppliers the certainty required to add production capacity, hire and train new workers, and build boats faster.
At the same time, the Navy announced a new multi-year contract with Raytheon to increase annual Tomahawk missile production from 68 to more than 1,000. That’s billions of dollars in new physical plant and skilled workers, and is just one example among many.
But contracts like this are only half the plan. The President’s separate August 13 memorandum orders plans for a fifth public Navy yard and a Component Repair Center stocked with complete “ship sets” of submarine spares.
Private yards build the fleet; public yards keep it at sea. America needs more of both.
Electric Boat’s 2026 goal is 8,000 hires across Connecticut and Rhode Island. HII reports that shipbuilding throughput rose 14 percent in 2025 and says it is targeting another 15 percent this year.
Five- to seven-year government commitments make those investments possible. A manufacturer cannot expand a plant, finance suppliers, qualify new sources, buy years of material, and train thousands of new and badly needed workers against one-off orders Congress may or may not renew. Long production runs turn demand into something a company can build against. They also greatly reduce the unit cost and the time to completion for the taxpayers.
You can’t command the seas with ships you can’t build, refuel, repair, or replace. Trump isn’t just buying missiles and submarines. He’s rebuilding the machine — and the workforce — that builds them.
I Told You This Was Coming
In February 2025, I wrote that Trump was turning America into the world’s energy powerhouse, using abundant oil and natural gas not merely to lower costs at home but to take markets from Russia and OPEC, supply our allies, strengthen the dollar, and turn trade negotiations into long-term orders for American energy.
Last July, when Congress made the Trump tax cuts and immediate business expensing permanent, I explained how the One Big Beautiful Bill would unleash purchases of plants and equipment that temporary provisions never could.
Then, in January, I went on Fox Business and NTD to predict the coming 2026 economic boom. I specifically pointed to the permanent tax cuts, Trump’s deregulatory offensive, $18 trillion in multi-year investment commitments, the reshoring of manufacturing, sharply higher defense spending, and the energy revolution.
I could list a hundred others, but the main point was always this: 1982 and 1983 were exactly the same. Real and permanent tax cuts spurred a surge in CapEx that slowly but surely transformed the economy. And in 1982 and 1983, the Enemedia breathlessly told us how the terrible economy and Reagan’s “trickle-down economics” (their term, not his), would result in his being a one-term President and leaving office in disgrace.
Yet he was right. And in 1984, he won 49 states.
So here we are again.
The Industrial Supercycle Is Hiring
Last month, I wrote:
What we’re seeing right now is an order-book, equipment, construction, capacity, export, and productivity boom. Finished factories, full-rate production, broader hiring, and rising industrial wages come later. You don’t hire the entire operating workforce before building the plant. You don’t deliver the submarine before expanding the yard. And you don’t get the later output without making the earlier investment.
You didn’t in 1983 either.
Friday added the next link: payrolls. Factories are being built at an accelerating rate; the full fruit of that labor lies ahead. But orders are becoming shipments and output, and the industrial buildout has begun to hire.
For a generation, America’s ruling class told us manufacturing was gone forever. China would build; we would consume. Russia and the Middle East would supply the energy. Europe would regulate. America would borrow, import, and manage its inevitable decline.
Trump rejected every part of that foolishness.
The quiet boom is getting louder. The capital-goods surge that concealed it in August is now being followed by higher American production, lower unit costs, and new industrial paychecks. And the companies at the center of it have the profits and order books to keep building.
The Trump economic boom is here. But we’re still only seeing the leading edge of a Cat 5. The American industrial supercycle has begun.
