Trump's Second Term: The Economy

A little good news to start 2026: In the US, the household debt-to-GDP ratio was below 70% in the most recent two quarters of data (Jan-Jun 2025), continuing a long downward trend begun in 2008 and only briefly disrupted by COVID-19.

Fear not! I am wholly convinced that the Orange Anti-Christ had absolutely nothing to do with it, and if he ever finds out, he'll denounce it as Democratic fake news.


https://fred.stlouisfed.org/series/HDTGPDUSQ163N
 
On the other hand Trump hasn't needed to borrow recently so ....???? :)
 
Looking forward to my Venezuelan Oil Dividend check, with the costs of healthcare rocketing so much this year. ;)
 
Looking forward to my Venezuelan Oil Dividend check, with the costs of healthcare rocketing so much this year. ;)
Just wait for American oil companies to step back into Venezuela now Maduro is gone, and wait, and wait and wait
 


CBO on the Budget and Economy, to 2036

In CBO's projections, the federal budget deficit in fiscal year 2026 is $1.9 trillion and grows to $3.1 trillion by 2036. Relative to the size of the economy, the deficit is 5.8 percent of gross domestic product (GDP) in 2026 and grows to 6.7 percent in 2036, which is greater than the 3.8 percent deficits averaged over the past 50 years. Rising net interest costs drive much of that increase. The primary deficit, which excludes those net interest costs, totals 2.6 percent of GDP this year and stays below that level through 2036, when it totals 2.1 percent.

https://www.cbo.gov/publication/61882


My take

The plan is to take 0.8 percent ($65.7 billion) LESS out of the economy by 2036 (as compared to the previous plan), including 3.7% less ($163.8 bn) less from individuals. However, payroll taxes will go up by 2.3% ($60.8 billion), and corporate taxes by 11.4% ($58.9 billion). The catchall “other category will mysteriously fall by $429.5 billion (-51.7%).

Outflows will increase by $262.4 billion (+2.4%) from previous estimates. Discretionary spending will fall $71.1 billion (-3.1%), while mandatory ones will rise $562.9 billion (+8.7%), and net interest payments by $361.4 billion (+20.3%). Discretionary defense will get $11.4 billion more (+1.1%), at the expense of non-defense: -$120.7 billion (-9.9%).

Social Security payments will rise $123.2 billion (+4.7%), Medicaid up $119.7% (+11.7%), but Medicare will fall by -$196.4 billion (-9.1%). The infamous “other” programs will get an extra $215.9 billion (+4%).

As a result, the national debt held by the public will rise by $1,327.3 billion (+2.4%).

Of course, the economic forecast changed in the past year, too. Corporate profits will be 5.3% larger in 2036 than we thought a year ago (How, you ask? Don’t.) But, if (as predicted) imports will be 13.9% lower, that would be a clear sign of a weak economy. While inflation will still be just 2.3% (oh, really?), 10-year Treasury bonds will pay an extra 500 basis points (@ 4.4%), for some reason.

Another way of putting it is that real interest rates will rise by nearly 600 bps.
That might explain the weak economy.
 
Grocery prices

Household expenses rose significantly last year, despite what the (mal)administration would like us to believe. While headline consumer inflation eased from +2.95% in 2024 to +2.71% last year, many components bucked the trend.

Home gas was +13.8% more expensive, after falling -2.2% in 2024. Telecommunications, including internet access and cable, was +3.9% more costly (+3% a year earlier). Financial services, including insurance, rose +5.5%, down from the +6.8% pace of 2024.

It was not a good year for carnivores. Ground been was up +11.9% (+4.5% in 2024), and +12.3% (vs. +3.9%) for the lean variety. Ground chuck (+13.5%, vs. +8%), chuck roast (+12.7%, vs. +6.2%), and sirloin (+11.8%, vs. +5.2%) made beef prices harder to swallow. The overall poultry, fish and eggs price index rose +5.7%, up from +2.2% in ’24.

Breakfast might be the daily meal hardest hit by rising prices. Eggs leapt +34.1% in 2025, after rising +13.4% a year earlier (and, +70.7% in 2022 as culling reduced supply). Coffee was up +29.4% (vs. +2.7% in 2024), and orange juice (frozen concentrate) rose 8.2%, after three years of jumping nearly 20% p.a., and doubling since the pandemic.

Spaghetti continues to be more and more economical. The long, thin strips of pasta fell in -1.2% in 2024, and a further -6.6% last year. White bread was also down, -5.1%.

All the numbers are at https://fred.stlouisfed.org/, but you have to crunch them yourself.
 
  • Like
Reactions: JRT

US loses 92,000 jobs in February, falling far short of expected gain​


The U.S. lost 92,000 jobs in February and the jobless rate rose to 4.4 percent, according to data released Friday by the Bureau of Labor Statistics (BLS).

The February jobs report showed the nation’s labor market rapidly losing steam last month, defying the expectations of experts. Economists expected the U.S. to have gained roughly 60,000 jobs last month, with an unemployment rate of 4.4 percent, according to consensus estimates.

Job growth was widely expected to slow after much of the U.S. was battered by winter storms last month, following an unseasonably warm January. A surge in the number of striking workers was also likely to take a chunk out of February job gains.

But the steep drop is an alarming sign amid rising concerns about the economic impact of the war in Iran, which is fueling a surge in oil prices.

BLS also issued troubling revisions to previous jobs reports, bringing the total number of jobs gained since December down by 69,000.

The agency revised December 2025’s intitially reported gain of 48,000 jobs to a loss of 17,000 jobs, and cut down the 130,000-job gain intitally reported in January to 126,000.

The health care sector, which has long been the fastest and steadiest growing industry for employment, lost workers in February, largely due to strikes in California and Hawaii.

Job losses were widespread throughout the economy, however.

The information sector lost 11,000 jobs in February as the rise of AI and a reversal of the post-COVID tech hiring frenzy continued to sap employment in the industry. Federal government employment fell by 10,000, and is down 330,000 since October 2024.

Employment barely changed in the miming, construction, manufacturing, financial and retail sectors, and the social assistance sector gained 9,000 jobs.

The U.S. suffered its worst non-recession year of job growth in 2025, averaging roughly 50,000 new jobs per month during Trump’s first term. Inflation also ended the year little changed after rising and falling amid the uncertainty driven by the president’s trade agenda.

The combination of a hobbled job market and rising energy prices could throw the economy into a deeper slump — and ramp up political pressure on President Trump and Republicans ahead of the midterm elections.
__________
 
Zero Hedge on Friday:

https://www.zerohedge.com/markets/i...native-born-us-workers-were-just-revised-away

The data showed that since Trump entered the White House “the number of foreign born workers has slumped from a record 33.7 million in March 2025 to 32.1 million, a drop of 1.6 million. This has been offset by a slow but consistent increase in native-born workers which had been unchanged for six years since 2019 until the start of 2025, at which point it started to rise again, and has increased from 131.2 million in March 2025 to a new record high of 133.2 million in September.

Why does this matter? Because today’s job report, which was undeniably dismal and sparked added to the sharp selloff across the market, also updated the working age population calculations to reflect the latest US Census population count for 2025. The new controls led to a big change in the January estimate of various employment metrics. They

Lowered the working-age population by 231k;
Reduced the labor force by 1,417k;
Cut the employment level by around 1,432k;
Lowered the labor-force participation rate by 0.46 percentage point and the employment-to-population ratio by 0.47 ppt.

But perhaps the most important revision is that the entire boom in native-born employment was fake news: a statistical mirage spawned by some overzealous BLS staffer’s excel model.

Presenting exhibit A: the monthly change in native and foreign-born workers. It shows that while the number of native-born workers in February did post a solid rise of 877K – using the revised data – this was only after the January data was revised comprehensively to wipe out a record 2.5 million (exactly) native born workers.

And here is what it looks like over the longer-term: at just under 131 million, the number of native born workers is back to where it was in 2019.

Which means that what some consider the greatest accomplishment of the Trump admin was nothing more than statistical fake news. The silver lining: at least there is the Iran war to keep everyone distracted.

Go to link for the graphs.
 
The US Current-Account in 2025

The US current-account – the net sum of what is traded across borders – continued its unbroken streak of deficits for the 43rd straight year. At a level equal to -4.2% of 2025’s GDP, it is at the deepest level since the second Bush Administration (-4.3% to -5.7%, during 2002-08).

Merchandise imports outpaced exports by a record -$1,240.8 billion; the services balance was also a record, at +$329.1 billion.

From the start of comparable data in 1960, the current account was in surplus for 11 straight years (1960-70), then back in the black in 1973-76, after two years of deficits (1971-72). From then on, there were only three surpluses: the deep recession years of 1980-81, and Gulf War I (1991), when Japan paid heavily in support of US military activities.

By administration, GOPers presided over larger merchandise deficit, smaller services surpluses, and lower primary and secondary investment flows.




[[https://apps.bea.gov/iTable/?ReqID=...Qcm9kdWN0IiwiMSJdLFsiVGFibGVMaXN0IiwiMSJdXX0=]]
 

U.S. Worker Thriving Declines as Job Market Pessimism Grows​

Over half of employees are seeking or watching for new jobs, even as most say it is a bad time to find one.

1be325b6-3b0e-49ce-be00-2a580ff9d3fa.jpg

by Sarah Fioroni
New Gallup data confirm that the personal and professional environment of U.S. workers was worse at the end of 2025 than at any point in the past three years across several important metrics. For the first time since Gallup began tracking the life evaluation of the U.S. workforce, more workers report struggling in their lives (49%) than thriving (46%): a stark reversal from 2022 and 2023 when more than half of employees were classified as thriving. This is coupled with U.S. worker engagement dropping to the lowest level on record in the past decade at 31% engaged employees.

Similar trends cut across multiple dimensions of economic perceptions. Confidence in the job market has collapsed to a new low, with just 28% of workers saying now is a good time to find a quality job, down from 70% in mid-2022. More than half of workers are actively looking for a new job or at least watching for opportunities. And nearly half of those actively searching report it has been a negative experience, with many unable to land an interview.

Some workers are feeling the strain more acutely than others. The life thriving rate of federal workers has decreased 12 percentage points on average since 2022. For the first time in the past three years, college-educated workers are the most pessimistic about the job market, and younger workers are more likely than older ones to say it is a bad time to find a good quality job.

The data point to a workforce that is restless but largely stuck. Many workers who want to leave cite economic constraints — from pay and benefits to the difficulty of finding a comparable role — as the primary barriers to making a move. With life evaluation at a record low and job market confidence near historic lows, the conditions weighing on U.S. workers show few signs of easing.

More U.S. Workers Struggling Than Thriving​

For the first time since Gallup began measuring the life evaluation of the American workforce, more U.S. workers are struggling in their lives (49%) than thriving (46%). This contrasts with 2022 and 2023, when the reverse was true, with the share of U.S. employees considered “thriving” staying in the low-to-mid 50s — a mark of relative resilience after pandemic disruptions. After staying steady between 57% and 60% from 2009 to 2019, the thriving rate among workers fell to 55% in 2020 before rebounding in 2021 then steadily decreasing after that.

The latest results are from Gallup’s Q4 2025 survey of U.S. workers, conducted Oct. 30 through Nov. 13. Gallup’s measure of thriving is based on its Life Evaluation Index, which summarizes how respondents evaluate their current life and their anticipated life five years from now on a 10-point scale. In addition to those who met the standard for thriving and struggling, 5% of workers were suffering in 2025.

The slide in workers’ thriving rate has been gradual but consistent. No quarter since early 2024 has shown sustained improvement — meaning back-to-back quarters when the thriving rate increased. The 46% thriving rate in Q4 2025 is the lowest in Gallup’s trended worker data compared with Q1 2022 when 53% of employees were thriving.

The significance to organizations and the economy is real given that worker wellbeing has a tangible impact on organizations’ bottom line. Gallup research finds that workers who are not thriving are more likely to miss work due to illness and to be seeking or watching for a new job. Thriving employees miss 53% fewer days of work due to health problems and are 32% less likely to be actively seeking a new job. As thriving falls, organizational performance risks follow.

Federal Workers’ Thriving Dips​

All major segments of the U.S. workforce experienced a worsening outlook on their lives since 2022; however, federal government employees stand out for the severity and speed of their decline.

In 2022, federal workers were significantly more likely than the average U.S. worker to be thriving, with their average of 60% thriving rate four points above state and local government workers and six points above the overall worker average of 54%. By 2025, federal workers’ thriving rate fell 12 points to an average of 48%, far outpacing the drops in state and local government workers’ combined thriving rate (down six points to 50%) and the average for American workers (down six points to 48%).

The steepest portion of the federal decline came most recently. While federal worker thriving held relatively steady between 2022 and 2024, it fell sharply in 2025, converging with state and local government workers for the first time in the trend. Thriving levels decreased across federal workers of all political party affiliations.

The pattern suggests the forces behind the decline in federal worker thriving rates are unique to the federal environment in the recent period. A 2024 Gallup report identified engagement stagnation in federal agencies following the pandemic, with unclear role expectations and trust in leadership as key factors in retention.

Shaken Job Market Confidence​

The downturn in U.S. workers’ thriving since 2022 has unfolded alongside worsening perceptions of the U.S. job market. In Q4 2025, 28% of U.S. employees said now is a “good time” to find a quality job, with 72% calling it a bad time. This marks a dramatic reversal from mid-2022, when nearly 70% of workers were optimistic. The 42-point decline since then represents the largest collapse in job market confidence Gallup has recorded in the past four years.

The shift has meaningful implications for employers. In a strong labor market, dissatisfied employees leave their organizations. In a tighter market, those corrections can be stalled. When workers cannot, or believe they cannot, leave, discontent can accumulate inside organizations rather than being corrected with turnover. This can create a quieter but more persistent drag on productivity, morale and culture.

College-Educated and Younger Workers Most Pessimistic​

Workers with higher levels of formal education were markedly less optimistic about the job market in 2025 than those with less schooling. This finding could reflect white-collar hiring slowdowns and layoffs in professional sectors.

Greater pessimism about the job market among higher-educated workers is a new pattern in the trend. Up until 2024, workers with undergraduate or more advanced college degrees had been slightly more optimistic about the job market than their less-educated peers, but that relationship reversed sharply in 2025. By Q4 2025, just 19% of college-educated workers said now is a good time to find a quality job, compared with 35% of workers without a college degree, a 16-point gap.

Younger workers today are more pessimistic about the job market than older workers. One in five workers aged 18-34 say now is a good time, compared with 41% of those 65 and older. Baby boomers (42%) and Generation X workers (33%) are significantly more optimistic than millennials (24%) and Generation Z workers (19%) in 2025.

Younger Workers Most Likely to Be Looking​

Turnover intent has held near its highest level since Gallup began tracking in 2015. In Q4 2025, 51% of U.S. employees said they were either actively looking for a new job (11%) or watching for opportunities (40%). Fewer than half of the U.S. workforce said they were not looking at all. Since 2015, active or potential job seekers ranged from a low of 42% in 2018 to a high of 52% in Q3 2025.

The gradient in job-seeking by age is steep. More than three in five Gen Z workers (17% actively seeking and 44% watching) are at some level of risk of leaving their employer. Millennials are similarly restless, with 13% actively seeking and 44% watching. By contrast, only 4% of baby boomers are actively looking, and 74% say they are not looking at all.

This generational divide aligns with the broader conditions of what Gallup has called the Great Detachment — a period in which workers are seeking new opportunities at the highest rate since 2015, while engagement has fallen to decade lows, and job market conditions are too weak to support easy transitions. Younger workers, more likely to be in roles lacking clarity of expectations, recognition, and developmental support, have the most to gain from a change and the most frustration with staying.

What's Pushing Workers to Look? Pay, Growth, Leadership​

Among workers who are actively looking or watching for opportunities, 56% say the reason they are looking for a new job is that they are hoping to find something better or different. Just over two in five (44%) say they are looking because they are dissatisfied with some elements of their current job.

No matter whether workers are motivated by dissatisfaction or improvement elsewhere, the top cited reason for looking is pay or benefits (69% of workers who are looking for something better and 53% of workers who are dissatisfied). More opportunities to grow and advance is the second most-cited reason for job-seeking behavior. However, when it comes to those who are motivated by dissatisfaction, 27% say leadership or management is a top three problem in their current role.

Why Workers Stay: The Economics of Inertia​

Intent isn’t always sufficient for change. About 30% of all U.S. workers in Q4 2025 agree or strongly agree that they “feel stuck” in their current job. A larger share (43%) report they remain in their current role primarily because leaving would be too difficult or costly.

When workers who feel the cost of leaving is too high are asked what specifically makes leaving difficult, their answers are overwhelmingly economic. Nearly seven in 10 (69%) cite their inability to afford to lose their current pay or benefits. More than half (51%) say it would be hard to find a comparable job. A substantial share (36%) depend on their current schedule or flexibility arrangements.

Among U.S. workers who are actively pursuing new positions, many find the job search environment inhospitable. Nearly half (49%) rate their job search experience as very or somewhat negative versus just 26% who say it has been positive. More than half of those who applied for at least one job in the past 30 days report not securing a single interview. The job market is not just perceived as difficult — it is proving to be so in practice.

Bottom Line​

The Q4 2025 data capture the growing struggles of the U.S. workforce. The percentage of workers who are thriving in their lives has hit a low. The decline is especially pronounced with federal workers among whom the percentage thriving fell about 12 points since 2022, including 10 points over a two-year period. At the same time, confidence in the job market has dropped, and many workers are at least considering leaving their current role.

What makes this moment distinct is not just the scale of discontent, but the conditions that surround it. Workers who want to leave largely cannot — constrained by economics, a cooling labor market and the difficulty of finding anything comparable to what they have. The result is a workforce that is restless but largely immobile, with job watching increasingly concentrated among younger workers who are still in the early stages of their careers.

For leaders and managers, this poses a significant risk to performance. Declining engagement and thriving have well-documented effects on productivity, retention and customer outcomes. Identifying and addressing potential root causes, such as clarity of expectations, meaningful recognition and work’s impact on wellbeing, represents both the challenge and the opportunity faced in 2026.
____________________
 

Trump’s go-to moves to influence the markets are increasingly falling flat as the Iran war drags on​


WASHINGTON (AP) — As the Iran war intensifies, President Donald Trump has prioritized efforts to calm the financial markets — trying to keep oil prices from exploding upward, stocks from cratering and interest rates from surging.

When the markets have flashed danger, Trump has been quick with a social media post or a remark to claim the war he launched last month could soon end. He’s publicly declared that the markets are doing better than he expected, even with the S&P 500 stock index declining over the past five weeks and the global oil benchmark up roughly 60%.

“I thought oil prices were going to go up higher than they are now,” Trump said at a Friday investor summit. “And I thought that we would see a bigger drop in stock. It hasn’t been that bad.”

With the Iran war, the White House has largely refrained from messaging more aggressively to voters about the economic consequences — choosing instead to try to contain any damage in the financial markets, which have swung wildly on the prospects of ceasefire or escalation in what has become a high-stakes guessing game about Trump’s next moves.

The Republican president showed the extremes of his messaging Monday before the U.S. stock market opened, writing in a social media post that great progress had been achieved on peace talks with Iran while also threatening civilian infrastructure such as desalination plants if a deal wasn’t reached “shortly.”

The White House sees the stock, energy and bond markets as a way to indirectly reach voters. Trump has staked his economic agenda on cheap prices at the pump, robust gains in 401(k) accounts and cheaper mortgage rates.

But that messaging appears to be wearing thin as the president’s various pronouncements have done little to change the reality that a large chunk of the world’s energy supplies is stranded by the conflict. Just 38% of U.S. adults approve of how he’s handling the economy and only 35% support him on Iran, according to a March survey by The Associated Press-NORC Center for Public Affairs Research.

The president has tried to dictate to markets instead of talking directly to Americans​

Gene Sperling, a top economic adviser in the Democratic Clinton, Obama and Biden administrations, said voters can make a direct connection between prices at the pump and Trump’s choice to attack Iran. He said “simplistic jawboning” to the markets is insufficient for a public that is stuck paying the price as gasoline soars past $4 a gallon nationwide.

“Most advisers would say the president has to speak directly to the American people and fully acknowledge the economic pain that his policy has so directly caused in a short amount of time and make the case for why the national security concerns justify it,” Sperling said. “Instead, you have a strategy of not recognizing or even dismissing people’s economic pain.”

White House press secretary Karoline Leavitt on Monday called the oil price increases a “short-term fluctuation.”

Trump’s strategy of giving mixed messages has started to work against him, said Jeffrey Sonnenfeld, a professor at the Yale University School of Management and co-author of the new book “Trump’s Ten Commandments: Strategic Lessons from the Trump Leadership Toolbox.”

“The uncertainty is now soaring,” Sonnenfeld said. “As the messaging to calm markets with false reassurances is having diminishing credibility in financial markets, so, too, has Trump diminished public confidence.”

Trump’s desire for flexibility on the war limits his ability to offer clarity​

Trump has embraced having flexibility in how he chooses to conduct the war, even though this has muddled his stated objectives.

During a Cabinet meeting Thursday, he said Iran was “begging” for a deal even as he threatened further military action — all the while maintaining that any economic damage to the U.S. would reverse itself.

On Friday after the markets closed, he extended his deadline for Iran to open the Strait of Hormuz, a key waterway for the flow of oil, saying he would hold off on bombing Iran’s energy plants in the meantime.

Treasury Secretary Scott Bessent said Monday on Fox News Channel’s “Fox & Friends” that Iran was letting some tankers through the Strait of Hormuz and that the “market is well supplied” because countries are releasing their strategic petroleum reserves and sanctions have been removed for Russian and Iranian oil already on tankers.

“We are seeing more and more ships go through on a daily basis as individual countries cut deals with the Iranian regime for the time being,” Bessent said. “But over time, the U.S. is going to retake control of the straits, and there will be freedom of navigation, whether it is through U.S. escorts or a multinational escort.”

Graham Steele, a Biden-era Treasury official, said Trump’s messaging techniques “can work temporarily, but they have diminishing returns, over time,” if they’re detached from actual policies and results.

“We saw a lot of the volatile market reactions initially, when he kept announcing these things and then walking them back,” Steele said. “The market reaction now is just a steady trend upward in prices,” he noted, adding that markets are “not responding to it in the same way anymore.”

Confidence in the economy and Trump is fading without clear results​

The University of Michigan’s Index of Consumer Sentiment on Friday fell to a reading of 53.3 in March, its lowest level since December. Joanne Hsu, director of the surveys of consumers, pointed to the financial market volatility “in the wake of the Iran conflict” as reducing confidence in the economy for households with middle and higher incomes.

Hsu noted that the survey indicated that people do not expect the higher energy costs and stock market declines to persist, but that could change if the war “becomes protracted or if higher energy prices pass through to overall inflation.”

Gus Faucher, the chief economist at PNC Financial Services, stressed that low levels of consumer sentiment do not automatically signal a recession. But he said consumers would have to see lower gas prices, a steady stock market and decreased mortgage rates to feel better about the economy, which likely means a definitive resolution to the conflict rather than a series of pronouncements by Trump.

“The proof is in the pudding,” Faucher said. “People need to see some substantive improvements before they feel better about conditions.”
_____
 
The Budget to 2056

Since the (mal)administration didn’t bother to put together a budget proposal this year, the good people at the Congressional Budget Office took the initiative to put together some figures about what to expect between now and 2056.

“In lieu of publishing a report providing CBO's latest long-term budget outlook,
the agency is publishing the data that it would have presented in that report
.”
– Feb 25, 2026 [[https://www.cbo.gov/publication/62044]]
​

The vision is for revenues as a percent of GDP to rise by 0.8 percentage points in 2026-56, as compared to 1976-2025.
Spending will rise by 4.1 points, increasing the deficit by 3.4 points:

% of GDP _ 1976-2025 _ 2026-2056
Revenues _ _ _ _ 17.3% _ _ _ 18.1%
Spending _ _ _ _ 21.2% _ _ _ 25.3%
Balance _ _ _ _ _-3.8% _ _ _ -7.2%



The effect on the debt is below:
Interest outlays _ _ 2.1% _ _ _ _5.1%
Federal Debt _ _ _ 51.2% _ _ _133.9%
Held by the Public

Major spending:
Social Security _ _ 4.6% _ _ _ _ 5.8%
Major Medical _ _ 3.5% _ _ _ _ 7.1%

And, sources of revenue:
Individual _ _ _ _ _8.0% _ _ _ _9.4%
Payroll _ _ _ _ _ _ _6.0 _ _ _ _ _5.7%
Corporate _ _ _ _ _1.7% _ _ _ _ 1.3%
Other _ _ _ _ _ _ _ 1.5% _ _ _ _ 0.9%

If there is anything in this vision of the future that concerns you, please remember to register to vote, vote, and ensure your vote is counted.

THANK YOU for your attention to this matter.
 
Early 2026 US Trade

US exports rose 14.5% in the first two months of 2026, as compared to January-February of last year. Imports, however, were down by 13.3%. As a result, total trade contracted 3.6% while the balance fell sharply, by 45.6%.

In the case of consumer-driven America, robust imports signal a strong economy. Alas, consumer goods demand fell by one-third, and was the basis for more than half of the total decline.

The 44.6% drop in steel imports contrasts with a 25.2% rise in capital goods imports. In other words, companies are buying processed or finished products from abroad, reducing domestic suppliers' need for imported inputs..

On the export side, industrial supplies shot up 27.2%, and represented 35.4% of the total rise. Non-auto capital goods also rose sharply, by 14.7%. Vehicle and parts exports fell 9.9%.
 
We found the 2027-36 US Budget !

1. The White House budget numbers assume nominal GDP in 2036 will be $53,154 billion. The OMB’s figure is 16.6% less, or $45,590 billion. The WH hopes real economic growth will average +3.0% a year; the OMB forecasts +1.90% p.a.

2. The WH predicts mandatory spending will rise 5.2% -- in total – over the next decade. The OMB forecasts a 25.3% increase.

3. This is a spending program, not a budget. The WH budget mentions “revenue” three times: When discussing fees and other revenue collected by the State Department; in regard to the Treasury Department’s functions; and as the name of the Inland Revenue Service.

4. In a separate document, individual income tax receipts are expected to be 8.9% smaller than OMB estimates, payroll taxes down 13.4%, and corporate taxes 21.8% less. That’s $1,329.3 billion less revenue (-16.6%). With these figures, we can calculate that the Federal Debt Held By The Public will be 2.9% larger (at $46,919 billion) than forecast by the OMB.

And they lived happily ever after ...



 
“I don’t think we’re going back to the pre-war prices for the foreseeable future. Certainly won’t be this year, won’t even be next year. Might not be ever.”

— Mark Zandi, chief economist at Moody’s Analytics, quoted by Politico.
 
“The unemployment rate is 4.3%, for heaven’s sake! That’s a boom, for God’s sake!”

— White House economic adviser Kevin Hassett, on Fox News.

The unemployment rate was 4% when Joe Biden left office.
 
Price Check on Aisle 47

March’s 3.29% year-on-year rise in the Consumer Price Index was the fastest increase in 23 months, and the sharpest rise from the previous YoY rate (February’s 2.43%) in 53 months, dating back to the late-2021 COVID rebound.

The inflation spike pushed the real Fed Funds interest rate down 85 bps, to 0.35%. That’s the lowest in 35 months.

In the first three months of 2026, #2 heating fuel oil was up 12.2% over the same 2025 period. The biggest price hikes were for various cuts of beef, which rose from 16.7% (round steak) to 19.2% (all ground beef types). Chicken (-0.86%), chicken legs (-3.84%), and ham products bucked the trend.

Among the basics, white rice rose 3.8%, but white bread (-4%), spaghetti (-4.1%), and potatoes (-10.3%) were cheaper.

Cheese prices were contradictory: American fell 4.8% while cheddar rose 5.7%. The former fell for the 7th straight month, while cheddar rose for the fourth month in a row. A dozen eggs were 56.5% cheaper than a year ago. Fruits and veggies were up 2.5%.

Food purchased for consumption away from home was 3.9% more expensive, as compared for do-it-yourself, at +2.1%. Sadly, chocolate chip cookies rose 10.4% over the first quarter of last year, and coffee by 31.3%.


Fred.stlouisfed.org has the evidence.
 
In the past 25 years, the prices of everything households buy – personal consumption expenditure – increased by 2.2% per annum.

Of that, imported goods rose by 0.9% p.a. Among the drivers of inflation were imported dairy, meat and poultry (+5.2% p.a.); grains, vegetables, and beverages (+4.1% p.a.); and petroleum products (+3.8% p.a.).

What kept inflation down was the price of consumer goods. In particular, computers fell in price every by 4.0%, and peripherals and accessories by 3.4% p.a. Communications equipment – phones – fell by 8.9% every year. General household durable goods dropped by 4.0% p.a., and home entertainment and recreational products by 1.6% p.a.

So, next time someone suggests that jacking up the price of imports is good economic policy, think again.

Prove it: bea.gov
 

U.S. wholesale prices surged 4% last month during the Iran war​

WASHINGTON (AP) — U.S. wholesale prices surged last month as the Iran war drove up the cost of energy.

The Labor Department reported Tuesday that its producer price index — which measures inflation before it hits consumers — rose 0.5% from February and 4% from March 2025. The year-over-year gains was the biggest in more than three years. Energy prices surged 8.5% from February.

Excluding volatile food and energy prices, so-called core producer prices rose a modest 0.1% from February and 3.8% from a year earlier. The gains in wholesale prices were smaller than economists had forecast.

The surge in prices complicates the work of the inflation fighters at the Federal Reserve, who have faced intense pressure from President Donald Trump to lower their benchmark interest rate. But some Fed policymakers are inclined to raise rates instead, as higher energy costs increase the inflation threat.

Food prices, which will most certainly be front and center in next year's midterm elections, fell by 0.3% in March after surging by 2.4% in the previous month.

Wholesale prices can offer an early look at where consumer inflation might be headed. Economists also watch it because some of its components, notably measures of health care and financial services, flow into the Fed's preferred inflation gauge — the personal consumption expenditures, or PCE, price index.

The most recent peek at inflation in the U.S. validates a recent shift by the U.S. Federal Reserve to intensify its focus on rising costs, wrote Carl Weinberg, the chief economist at High Frequency Economics.

"The decline in food prices is overdue, and welcome news for everyone," Weinberg said Tuesday. "Food price increases are at the core of political arguments over affordability."

The Labor Department reported last week that soaring gasoline prices pushed consumer prices up 3.3% last month from a year earlier, the biggest year-over-year increase since May 2024. Compared to February, March consumer prices jumped 0.9%, biggest gain in nearly four years.

The war in Iran will lead to an annual decline in oil demand for the first time since the pandemic, when billions of people were trying to live in isolation, according to a forecast Tuesday by the International Energy Agency.

The agency, formed after the 1974 oil crisis, said that oil demand is expected to decrease by an average of 80,000 barrels a day this year, a sharp revision from the increase of 850,000 barrels a day that it had forecast before the war began.

The drop-off in March was particularly severe because of attacks on energy infrastructure and the shutdown of the Strait of Hormuz, according to the IEA, which expects a decline in demand of 1.5 million barrels in the current quarter.

While the biggest cuts in oil usage have initially come from the Middle East and Asia Pacific region, demand destruction is anticipated to spread as oil prices increase and scarcity continues.
____________________

Are we winning yet?
 
In the first two months of 2026 (March data will be available April 30), household spending on housing and utilities rose 0.8%, while the price went up 3.5%. Spending on furnishings fell 1.9%, as prices rose 4.8%. Spending on food service rose 1.2%, but prices were up 3%. Personal savings as a percent of disposable income dropped 15.4% – 0.8 percentage points – to an average of 4.3%.

Household durable goods prices fell in 8 out of 10 months since January 2008, but have been rising now for 10 straight months. February’s +2.8% is the single highest non-COVID month in more than 18 years.

Household recreational goods and vehicles prices fell an average of 3.8% over the past 18 years, until December. Since then? +2.9% average.

bea.gov has it all.
 
IMF World Economic Outlook, April 2026

In a nutshell, slower growth, higher inflation, and all the risks are “decisively on the downside.”
 
IMF World Economic Outlook, April 2026

In a nutshell, slower growth, higher inflation, and all the risks are “decisively on the downside.”

When Trump said he'd make America great again I didn't know the 'great' bit he was referring to was another Depression!
 
Last edited:
  • Like
Reactions: DOR

The US in Q-1 2026

The first quarter 2026 economic growth rate was a surprisingly robust +2.0% quarter-to-quarter annualized, or +2.7% year-on-year both are real, inflation adjusted measures). The quarterly figure was up from +0.5% in October-December 2025, and -0.6% a year earlier.

Real disposable personal income rose +0.7% in January-March 2026, as compared to the same 2025 period. That’s down from +0.9% in the final three months of last year, and from +1.3% 12 months earlier. On a per capita basis, the latest quarter’s +0.6% is less than half of Q-4’s +1.3%, which was down from +1.7% in the first three months of last year. Personal savings as a percent of disposable income remained at 4% in the first quarter, the same as Q4-2025, but down from 5.1% a year earlier.

Private consumption rose +2.4% (YoY)in Q-1, down from +3.1% in the same 2025 period. The slow rise in durable goods purchases (+1.0%, vs. +6.3% a year earlier) was led by recreational goods and vehicles, but constrained by falls in motor vehicles and parts, and furnishings and durable household equipment. In the non-durables account, clothing and footwear (+3.9%) carried all the water. In the services section of the family budget, healthcare soared +4.7%, transportation +4.1%, and recreation +3.7%.

On the capital investment account, real growth reached +3.2%, close to Q-4’s +3.4% and considerably better than the +2.0% recorded in early 2025. Almost all of the increase was accounted for by IT (+9.7%). The same was evident in the government sector.

Among the various categories of merchandise goods exports (+4.7%), non-automotive capital goods, and IT stand out as key drivers; and automotive vehicles and parts, and consumer durables as laggards. On the goods imports side (-7.2%), the sources of growth (contraction) were highly similar: non-automotive, and IT.


Bearing in mind that this preliminary look at the first three months is based on incomplete March data, the prospects for any up-side adjustments are quite poor.
 
What’s being billed as a positive April labor report by some masks the -0.5% decline in employment in the first third of the year, and the -0.8% YoY drop in April alone. That figure is the twice as bad as the -0.4% drop in March, and is the fourth in a row.

The unemployment rate crept back up above 4.3%, and is likely to record its 24th straight month above 4% in May. One reason it isn’t higher is the -4.6% decline in the 16-19 year labor force age group, in January-April (from a year earlier). Another is the soft to negative change in other age groups. Participation ratios are also down.

Indeed, the only bright spot is the 3.9% rise this year among those over the age of 65 who still consider themselves to be part of the labor force. Among seniors, employment is up 3.6% in the first four months of the year.
 
Since The Orange Anti-Christ assumed power, electricity prices have risen 6.1%, and home gas by 6.6%.
That’s the good news.

Cheddar cheese +7.8%
Orange juice +8.8%
Chuck roast +9.0%
Chocolate chip cookies +14%
Ground chuck +16.4%
Ground beef +22%
Tomatoes +22%
Coffee +32.6%

CPI data, Feb 2025-Mar 2026
 
Back
Top