U.S. Commerce Secretary Howard Lutnick says a surge in factory construction and data center investment could drive US economic growth far beyond what most investors consider realistic.
In a new interview with billionaire investor Chamath Palihapitiya, Lutnick says massive industrial projects already underway are setting the stage for a sharp acceleration in growth.
Lutnick points to large-scale semiconductor and manufacturing investments as evidence.
“Next year, with all this construction in the ground. Like this Friday, I’m flying up to New York to Micron’s groundbreaking of their tens of billions of dollars factory in upstate New York. Then I’m going to Detroit, where they’re doing a huge new build, a new auto plant, and they’re building their engine plant.”
According to Lutnick, the wave of capital spending has direct implications for GDP growth, noting that skeptics underestimate what that means in absolute terms.
“You’re going to see fives in the greatest economy in the world. You’re going to see fives. We have a $30 trillion economy, so five percent is $1.5 trillion in growth.”
Lutnick says growth could accelerate even further under an easier monetary policy.
“And if [the Fed] cuts rates, you’ll see six. People would never, before Donald Trump walked into that office, think that’s possible.”
Lutnick believes stronger growth would fundamentally reshape the labor market.
“What that means is jobs are abundant. Good jobs are abundant. High-paying jobs are abundant.”
He emphasizes that wage gains driven by expansion are not inflationary. In a boom environment, Lutnick says, higher pay reflects success rather than stress.
“You just get paid more money to be who you are. You make more money, and that is not inflation. That is called 6% GDP growth. If we have no growth and I pay you more because you demand more, that’s inflation. But if I’m trying to build a factory because I’m kicking tail, and I have to share some of my profits with you to convince you to come to work.”
Lutnick’s comments frame the current construction and data center cycle as a potential inflection point, where aggressive investment, faster growth and rising wages reinforce each other rather than collide.
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