Trade and tariffs in 2025 - this really didn't work, did it?

As you may have heard, the US Supreme Court told Donald Trump on Friday that he had no right to go out and slap tariffs on country without having Congress pass a law allowing him to do so. And naturally, Trump responded by whining like a bitch and planning to put in new worldwide tariffs of 10%.... wait, 15% (go ahead and try, old man).

In light of that, we got information about what happened to the flow of imports and exports in 2025 in reaction to Tump's tariff plans, and as you'll see 2025 didn't have a very different trade deficit than 2024, and December saw the trade deficit go up compared to the lows of October.

Trade deficits were volatile throughout 2025 as importers responded to President Trump's shifting tariff announcements, which have upended the global landscape but haven't significantly dented the US trade deficit, at least so far.

The data released Thursday by the Commerce Department's Bureau of Economic Analysis also provided an annual tally for 2025, totaling trade in both goods and services at $901.5 billion. The total for 2024, the last year of Joe Biden's presidency, was $903.5 billion…. The new monthly reading, delayed by the recent government shutdown, was the second consecutive increase following October's trade deficit of just under $30 billion — the lowest figure seen since 2009, which Trump and his aides often touted.

The new December reading saw US imports fall by about $5 billion to $287.3 billion, while imports jumped by $12.3 billion to $357.6 billion. Goods imported in 2025 rose overall, despite Trump's tariffs, to a total of about $3.4 trillion last year.

I do think it's important to note that how we got to that deficit of just over $900 billion is very different when comparing 2024 and 2025.

That ballooning deficit for the first part of 2025 reflects front-running that American businesses did, trying to bring in more imports before Trump announced tariffs on those products, and then backing off after Trump made his infamous “Liberation Day” announcement in April.

Meanwhile, the value of US exports were larger in every month of 2025 than the same month was in 2024, even as some countries put on retaliatory tariffs on US products.

So that’s good news. I would also guess that the 10% decline in the US dollar in 2025 contributed to this increase in exports, since it makes American projects cheaper overseas.

In looking at the figures, December 2025’s trade deficit of $70.3 million was nearing the monthly amounts that we had for much of 2024, which ranged between $71 billion and $81 billion in every month between April and November. But for now, I’ll say that we are on trend for a lower trade deficit in 2026, with exports going higher in 2025 and imports being lower in the second half of 2025. That would seem to indicate the tariffs are working if you only care about reducing the country’s trade deficit.

Of course, that doesn’t mean the average American might be better off as a result of that smaller trade deficit. It’s indisputable that tariffs raise prices from what they otherwise would have been, which is where I remind you that the New York Fed said this month that 90% of Trump’s tariffs were paid for by American companies and consumers.

In addition, employment in manufacturing continued to slide in 2025, so businesses weren’t onshoring to the US as a result of tariffs (ignore any media events you see about “future activity”, read the numbers).

Lastly, tariff revenue offset some of the extra deficits caused by Trump Tax Scam 2.0 and related increases in spending on ICE and the military (and grifting) in Trump's first year. But it plateaued in the second half of the year has been declining in recent months, as imports dropped and some tariffs were removed.

Other than bringing in a little more revenue (but nowhere near enough to make up for tax cuts or increased spending elsewhere), what have Trump's tariffs actually helped our economy or standard of living? I can't see it, likely because there is no strategy to help American manufacturing or offset the extra costs of these policies for everyday Americans. But the senile fool in the White House is going to screech and double down on it anyway, and the gutless GOPs in Congress aren't doing anything to stop it.

So now we have to waste a lot more time and effort to tell them "NO, DO YOU NOT GET IT?", and to get the hundreds of billions of dollars back that were taken away by this idiocy (and the Supreme Court's dawdling on the issue) in 2025. And it is infuriating to us in the non-elite, reality-based world.

It may not be recession, but economic growth got worse in year 1 of Trump 2.0

Before the markets opened on Friday, we got a surprisingly lousy report on economic growth for the end of 2025.

New data from the Bureau of Economic Analysis published on Friday showed the economy grew at an annualized rate of 1.4% in the final three months of 2025. Economists had expected GDP to grow at an annualized rate of 2.9% in the fourth quarter…..

In its release on Friday, the BEA said that "the deceleration in real GDP in the fourth quarter reflected downturns in government spending and exports and a deceleration in consumer spending that were partly offset by an acceleration in investment."

Underlying spending trends, however, remained solid, with real final sales to private domestic purchasers — the sum of consumer spending and gross private fixed investment — increasing 2.4% in the fourth quarter, compared with 2.9% in the third quarter.

Within that 2.4% rise in consumption, however, a sharp divide emerged in the quarter between goods and services, with services spending rising at a 3.4% rate and goods spending actually falling 0.1%.

The report also continued to show the impact the AI build-out is having on economic growth, with spending on information processing equipment contributing 0.65 percentage points to economic growth in the quarter. Among private fixed investment, which rose 2.6% during the quarter, spending on intellectual property products rose at the fastest rate, 7.4%.

That’s quite a bit different than what the Atlanta Fed was predicting ahead of the release of the GDP report, although the ATL Fed caught the downward trend as more data came in over the last month.

Then you look at the numbers underlying the Atlanta Fed’s models, and some of their stats match up. It’s the volatile “non-core” sectors where the differences show up.

President Trump is claiming that the government shutdown of October and November is the reason behind the decline in government spending. And certainly the main divergence between the ATL Fed’s 3.0% projection of GDP growth and the official report of 1.4% was a drop in Federal government spending, taking off 1.15% from Q4 growth. But then you look at the most recent Treasury Statement, and Federal government expenses didn’t seem to slow down in Q4 at all. So there may be some upward revisions to growth still to come.

I’d even argue that a bad GDP report isn’t necessarily bad for what TrumpWorld wants, since they and their tech oligarch funders are so strung out on debt that they need the lower interest rates that would come in reaction to a slower economy. But a different report on income and spending may have wrecked those plans, because it showed inflation was on the rise as 2025 ended.

Underlying U.S. inflation increased more than expected in December, and signs are pointing to a further acceleration in January, which would strengthen ‌expectations that the Federal Reserve would not cut interest rates before June.

The personal ‌consumption expenditures price index, excluding the volatile food and energy components, rose 0.4% after an unrevised 0.2% gain ​in November, the Commerce Department's Bureau of Economic Analysis said on Friday. Economists polled by Reuters had forecast the so-called core PCE price index climbing 0.3%. In the 12 months through December, core PCE inflation advanced 3.0% after increasing 2.8% in November….

The [overall] PCE price index increased 0.4% in ​December after rising 0.2% ​in November. [Overall] PCE inflation increased 2.9% year-on-year after gaining 2.8% in November.

The government also reported that consumer spending, which accounts for more than two-thirds of economic activity, rose ​0.4% in December after increasing ‌by the same margin in November. When adjusted for inflation, consumer spending gained ​0.1%, setting it on a slow growth trajectory heading into the first ​quarter.

That sure sounds like stagflation to me, and it shows that at the end of 2025, there was little difference in how the economy was doing vs the end of 2024 (when enough low-info voters put Donald Trump over the top in hopes of improving the economy). And in fact, the economy was likely slower than what we had in Joe Biden's last year.

Year-over-year Change

Real GDP
Q4 2024 +2.4%
Q4 2025 +2.2%

Real Personal Consumption Expenditures
Q4 2024 +3.4%
Q4 2025 +2.2%

PCE Price Index
Q4 2024 +2.6%
Q4 2025 +2.8%

Core PCE Price Index
Q4 2024 +3.0%
Q4 2025 +2.9%

Job Growth
Dec 2024 +1,459,000 (+0.9%)
Dec 2025 +181,000 (+0.1%)

In addition, there was a significant drop in personal saving by American consumers over the last half of 2025, as incomes stagnated while prices kept going up.

Seems like the end of 2025 indicates that we were in a slow-growth economy where businesses are taking growth in productivity for themselves, and not adding jobs or doing much to raise pay. And given that consumer sentiment stayed at depressed levels in February, don’t count on consumer spending to be that strong for Q1 2026 either.

And I sure wouldn’t expect SCOTUS striking down Trump’s tariffs to do anything for affordability or to lower inflation. The businesses that paid the tariffs aren’t getting their money back any time soon, and they sure as hell aren’t going to lower the prices that consumers have to pay. They’ll just pocket the profits and move on.

After letting LeMahieu back in, WisGOPs double up tax bills. And the numbers don't add up

After a week where Senate GOP Leader Devin LeMahieu complained he was being left out of a possible tax cut and school funding deal between Assembly Speaker Robin Vos and Governor Tony Evers, apparently Dev is now back in the game, with the GOP Legislature now working out their own deal.

Senate Majority Leader Devin LeMahieu, R-Oostburg, and Assembly Speaker Robin Vos, R-Rochester, sent a letter to the governor Feb. 16 outlining their proposal to address soaring property taxes and rising costs with the state's proposed $2.5 billion surplus.

"This is a generous, good-faith attempt to achieve our mutual goals of limiting the property tax impact caused by your misguided 400-year veto, helping families address rising costs, and ultimately doing what is best for the people of Wisconsin," LeMahieu and Vos wrote in the letter first reported by WisPolitics.

First of all, if the WisGOPs are blaming Evers for putting resources in K-12 schools as a reason property taxes went up, then they don't get to claim "good faith". Because the only reason we have higher property taxes for schools is because THE GOP REFUSED TO PUT ANY STATE AIDS TOWARD THE SCHOOLS THAT WOULD HAVE REDUCED PROPERTY TAXES.

But let's look at the WisGOP plan is. It appears to be a mish-mash where they added in parts of the property tax cut plan Evers and Vos were trying to work out, and then also put in the income tax rebate LeMahieu and other GOP Senators were asking for.

The GOP proposal includes:

$500 million to put toward the school levy tax credit, funding that would allow the state to offset property taxes.

$1.5 billion for income tax rebates ($1,000 for married filers and $500 for single filers).

$200 million in funding for special education costs.

$30 million to fund a grant program for businesses and households that were affected by flooding in 2025.

$1.4 million for an educator tax deduction (up to $300 of educator expenses per year per educator).

So a little more than $2.2 billion in all. The total price tag is important, because all of this would get rid of the entire $2.5 billion surplus, and leave a smaller cushion for the next 16 months of the state budget than what was expected before the Legislative Fiscal Bureau projected another $1.5 billion in available funds last month.

So barely 1/4 of a billion dollars of cushion to take care of unexpected expenses that may come up between now and June 30, 2027. And we already are projected to need another $213 million for Medicaid, let alone what other complications that Trump/GOP austerity is going to push down to Wisconsin state government. And if the flat job growth we have in both Wisconsin and America turns into an outright recession, we're going to need other moves to keep the budget in balance, with the next Governor facing a significant structural deficit in the budget upon taking office.

And while I approve of the idea of a tax rebate as a one-time giveback, I didn't realize the price tag of $500/$1,000 was $1.5 billion. Seems like it should be smaller, with $250/$500 allowing for a lot of other things to be put into play. And while increasing the School Levy Tax Credit by nearly 40% will nearly double the $254 million in additional revenue limit that K-12 districts can use for next year, it also gives bigger benefits to higher-value homes, and doesn't do anything to deal with inequalities in funding between schools like General School Aids do.

And other tax cuts working their way through the Legislature make these other tax cuts even less affordable. A "no tax on tips" bill has already passed the State Senate (cost $53.2 million in Fiscal Year 2026), and the Joint Finance Committee just signed off on a bill that would have no taxes for overtime pay, for a cost of nearly $326 million next year. So that would put us another $379 million in the hole if both of those bills became law.Because the numbers don't add up, so if WisGOP tries to pass all of these items in one swoop instead of splitting up these provisions into separate bills (as I bet they will), Wisconsinites are likely to get nothing, with Evers being able to blame the WisGOPs for being irresponsible.

This last-minute tax cut mismash will look especially stupid if the WisGOPs shrug and decide to go on a 10-month vacation without working with the Guv to get a deal done. And while these WisGOP dweebs think they've pulled a fast one by making it more likely Evers has to veto the entire $2.2 billion package, they're more likely to be giving yet another reason for Wisconsinites to throw them out of power, and let the Dems have a chance to put in a new and better way of funding schools and cutting property taxes.

Media may say it was a good month for INFLATION WATCH. But maybe not in the Real America

Another report on INFLATION WATCH hit on Friday, and on the surface, it showed price growth was moderating in the first month of 2026.

Inflation rose just 0.2% in January from December and fell to 2.4% on an annual basis. Both readings were less than anticipated, in a positive sign for consumers.

Broadly, economists surveyed by Dow Jones expected inflation overall to have risen by 0.3% in January. On an annual basis, the expectation was that inflation would be tracking at 2.5%.....

The Bureau of Labor Statistics said that the price of housing “was the largest factor” in the increase for the month, rising 0.2%. The same went for the “food at home” category, which tracks grocery prices.

The price of energy was among the biggest drops in January, falling 1.5%.

Core inflation, which strips out volatile categories, was also right in line with expectations. That could help bolster the argument that recent rate cuts and actions by the administration are working to bring inflation under control after it soared to 3% in September last year.

The year-over-year trends certainly seem to be going in the right direction, even if prices are still rising.

But if price pressures are easing, why are people so upset about things these days? Part of it might be because prices went up in Real America in January more than what the headline numbers would tell you. That's because the models that the Bureau of Labor Statistics has an expectation that prices will go up in January, and lowers the "official" seasonally-adjusted numbers in their CPI report.

In this chart, the change on the left is the change in actual prices, while the the change on the right is what gets reported after the BLS's seasonal adjustment.

Of course, those seasonal adjustments will inflate some of those same categories later this year, and the year-over-year increases do show some moderating. But I'll also note that the decrease in gas prices is certainly reversing in February, after the Trump Administration's shenanigans in Venezuela and the occasional sabre-rattling against Iran (oil companies can't survive with barrels under $60, you know). And the usual Springtime rise in gas prices seems to be happening earlier this year.

One other item I want to point out on the CPI report is that the costs for health insurance might not reflect what everyday Americans are paying. It lists the cost of insurance as only 1% of a typical month's expenses, while actual health services are another 6% of total expenses. These services also seem to reflect "full price" of those services, but does not account for the cost share between any subsidies that pay for those services and insurance. For a lot of Americans, the assistance they got went down at the start of the year, and they paid more for premiums and services, but that reality isn't showing up in many of these stats.

Bottom line - despite the good headlines that you may have seen on Friday in regards to the Consumer Price Index report, American consumers are still facing higher prices, and while the amount of increase may be moderating, the cost of living is still a significant problem for normal Americans. And flattening wage and job growth is an extra complication that wasn't there in previous years.

Surplus plans come up. Property tax cuts? Schools? REBATES?

In the last few days, there's been quite a bit of discussion at the Wisconsin Capitol in regards to what should be done with the state's new $2.5 billion budget surplus. This includes the release of an email where Governor Evers told Assembly Speaker Robbin’ Vos about a K-12 schools and tax cut deal that he would be OK with.

The email shows Evers’ staff offered to sign one bill that includes the guv’s priorities of $200 million to increase reimbursements for special education and $450 million for general school aid, which would drive down how much districts can raise through property taxes to cover their costs.

In exchange, his staff offered support for putting $550 million into the school levy tax credit, which offsets some of what homeowners would otherwise pay in property taxes for schools. The offer also included $97.3 million toward exempting cash tips….

According to the email, GOP leaders had rejected Evers’ call to make reimbursing special education expenses sum sufficient.

The state budget included a nearly $505 million increase in special education through a sum certain appropriation. That means that the amount of money for special education aid is capped and districts will receive a prorated amount to reimburse their costs from that pot of money.

When the budget was signed, the Legislative Fiscal Bureau projected the boost in state money would result in a reimbursement rate of 42% in 2025-26 and 45% in 2026-27. But DPI notified districts in November that the interim proration rate for 2025-26 is 35% after costs in 2024-25 increased by 9% rather than the expected 4%.

Do we got a deal?

And Vos indicated this week that he and the other Assembly Republicans might be OK with something similar to that package. To the point that Vos backed away from demands that Evers get rid of his "400-year veto" guaranteeing an increase in available resources for public schools.

Assembly Speaker Robin Vos, R-Rochester, reiterated Feb. 11 that he will not make a relief package contingent on a repeal of Gov. Tony Evers' budget veto that provided school districts with revenue increases for four centuries – something Vos previously said would have to be "part of the discussion."

"Look, I think the 400-year veto is wrong. But I also think that the most important thing for us is to make sure that the surplus is given back to people to help deal with rising property taxes, rising electric costs and all the associated things dealing with inflation," Vos told reporters, adding that he won't require a veto repeal "as the only way that we get a deal."

Vos said his office had a "good meeting" with Evers' staff the previous day to look for areas of agreement as they seek to use some of the state's projected $2.5 billion surplus to offset soaring property taxes.

As I’ve said before, it’s silly for Republicans to try to hold hostage the $325 per student increase for K-12 schools, since Evers won’t change that total for next year, and because a future Governor and Legislature can change the amount of schools’ revenue limits whenever they agree to do so.

So Vos seems to be throwing that tactic away, and (at least publicly) wants to be seen working with Evers on the property tax reductions. But it looks like Vos’s counterpart in the other house of the Legislature has his group going in a different direction.

The same day, Senate Majority Leader Devin LeMahieu, R-Oostburg, said Senate Republicans had a "great caucus" on the issue, working on "fine-tuning" where its members stand.

LeMahieu told CBS 58 earlier in the day that "in order to do anything for school funding or running it through school aids, we're going to need to repeal the 400-year veto."

In addition, LeMaheiu and other Senate Republicans have a different idea for how to use the surplus funds.

Senate Bill 1 will provide Wisconsin families with rebate checks up to $1,000.

Madison- Senate Majority Leader Devin LeMahieu (R-Oostburg) made the following statement regarding the introduction of Senate Bill 1, which will provide married-joint income tax filers with a $1,000 income tax rebate and provide all other filers with a $500 income tax rebate:

via GIPHY

I’m not going to give you the spin LeMahieu is giving as to why, but I do have a question. Did Senate GOP staffers check out this post I made? (hilarious on multiple levels if true) :P

The income tax rebate bill is already set for a committee hearing on Thursday. It looks like the rebate would be based on who filed in Wisconsin in tax year 2024, and here’s how people would get that money.

The department of revenue shall identify the taxpayers who are eligible to receive a rebate...and the amount of payment due each taxpayer. The department of revenue shall certify the allowable amount of the rebate to the department of administration for payment by check, share draft, or other draft drawn from the appropriation account under s. 20.835 (2) (cd). The department of administration shall make the payments under this paragraph no later than September 15, 2026.

The department shall establish procedures for taxpayers who do not receive a rebate or receive less than the full amount for which they are eligible under this subsection to file a claim for payment by December 31, 2026. The department of revenue shall establish a portal on its Internet site for these individuals to file a claim for payment. No taxpayer may make a claim for a payment under this paragraph after December 31, 2026.

Getting the payments out by Sept 15 would mean Wisconsinites would get a benefit faster than having to wait for the effect to show up on their property tax bills in December, which is why I’ve advocated for this type of rebate - although I’d base it on 2025 tax bills vs 2024, unless that proves too difficult to get that information lined up in the time period between May 2025 and Sept 2025.

The drawback of using a rebate is that none of the state funding goes to school districts, which doesn’t solve the concern about how to keep increasing amounts of property taxes from paying for K-12 education. Which means 2026’s property taxes would still be set up to be high, and it still (correctly) portrays Senate Republicans as a group who don’t want to fund community schools.

It’s interesting to see Senate GOPs go out on this island of income tax rebate in opposition to both the Assembly GOP and Governor Evers, and I’d encourage Senate Dems to try to split the difference – agreeing with some kind of income tax rebate while also adding some state funding to K-12 schools. It’s also always fun to see Dweeby Robbin’ Vos get faced by his own party members in the Senate, and that’s all the more reason for Dems to get their names on possible tax relief packages, to be seen as a part of the solution while the GOPs flail around.

With maybe a month to go in the session before the GOP adjourns for the Legislature’s 10-month paid vacation, let’s see if something gets worked out. And let's see if the WisGOPs wreck the chances of any tax relief by fighting amongst each other, which would make it even more likely that they’ll have no power at all at the Capitol this time next year.

Don't buy the headline. The job market still sucks for most of America

Wednesday’s US jobs report was heavily anticipated for two reasons. Not just because it would give us a look at how the jobs market started 2026, but also in how we would find out more information about 2025’s job situation. That’s because the January jobs report also includes the benchmark revisions for the previous year, and a preliminary revision from last Summer indicated that there would be a reduction in earlier job growth of more than 900,000 jobs through Spring.

Sure enough, the revisions were sizable for 2025, resulting in already-weak US job growth to sink near zero.

…[the Bureau of Labor Statistics] shaved off more than 400,000 jobs from the 2025 employment gain, leaving the U.S. with just 181,000 new jobs in 2025, compared to an initially reported 584,000.

The preliminary revision of 2025 jobs data is part of an annual process. Each year, the agency recalculates the previous year’s employment changes based on new federal data on the U.S. population. In 2025, BLS subtracted almost 600,000 jobs from the 2024 total employment gain.

Trump administration officials sought to downplay the importance of the January jobs numbers in the days leading up to the report’s release; top White House economists attributed an employment slowdown under Trump to the administration’s mass deportations, which they say lower the number of jobs the U.S. is required to create.

The 15,000-a-month average for last year is the worst non-COVID figure for job growth since the Great Recession was happening in 2009. And as you can see, most months of 2025 were revised down.

But don’t worry, those 2025 troubles are all behind us, because the January jobs report was awesome!

The US economy added an estimated 130,000 jobs last month, and the unemployment rate ticked down a tenth of a percentage point to 4.3%, according to new Bureau of Labor Statistics data.

That’s far stronger than the 75,000 net gain economists had projected, and it’s only 51,000 jobs shy of the entirety of the jobs created in 2025, BLS data shows….

“The labor market appears to be stabilizing,” Heather Long, chief economist with Navy Federal Credit Union, told CNN. “That’s the first step to recovery.”

January marked the strongest month of job creation since December 2024.

Uhh, let’s hold off onto whether this portends a great 2026 for the jobs market, and not just because 130,000 jobs added in a month would have been a subpar number for most of the last 15 years. Once you look closer at the numbers, it’s clear that this isn’t that good of a jobs report.

The first way this jobs report masks an overall still-lousy jobs market is because many more people in January weren’t working compared to December. It’s just that the dropoff wasn’t as much as what the Bureau of Labor Statistics expects for that time of the year.

Job change Dec 2025 – Jan 2026
Seasonally adjusted +130,000
Not seasonally adjusted -2,649,000

So the “growth” merely reflects lower-than-normal post-Holiday and cold-weather layoffs. Which we might expect given that unemployment claims were still low through mid-January, and that all those layoffs that were announced last month won’t result in people losing their jobs until later this year.

The second reason that the January jobs report isn’t as great as a six-figure gain would indicate is because of how lopsided it is toward a small number of sectors.

That “all other jobs” category accounts for nearly 4 out of 5 jobs in this country. Which means 80% of American workers are seeing no job gains at all in the sector they work in.

An absurd amount of the job gains coming from health care and social assistance has been a trend for well over a year, but that hot streak will likely be threatened as more Americans lack health insurance in 2026 and ICE likely harms an industry where 1 out of 6 workers are immigrants.

And that 33,000-job gain in construction isn’t from a boost in activity as much as it is a lower-than-normal January decline of 213,000 jobs. So let’s see if that reverses in the coming months if Springtime construction hiring doesn’t meet modeled targets (especially with Trumpist ICE raids may well hamper the availability of a sizable portion of that workforce).

The January jobs report reiterated that most of our real economy was struggling as 2026 began. And average hourly wage growth is still mediocre at 3.7% over the last 12 months, (although there was a not-bad 0.4% increase for the first month of the year). Until we see that wage growth start growing on a consistent level , and until more than 1/5 of the US jobs market starts seeing any kind of significant growth, I don’t see why consumers would stop being so down on the economy.

Weak retail sales for Holidays and lower wage growth as 2025 ended

We're still a bit delayed on some economic data, which means we had to wait until today to find out that consumer spending at stores slowed as 2025 ended.

U.S. retail sales were unexpectedly unchanged in December, putting consumer spending and the overall economy on a ​slower growth path heading into the new year.

The flat reading in ‌retail sales last month followed an unrevised 0.6% increase in November, the Commerce Department's Census ‌Bureau on Tuesday. Economists polled by Reuters had forecast retail sales, which are mostly goods and are not adjusted for inflation, would rise by 0.4%.....

Retail sales excluding automobiles, gasoline, building materials and food services fell 0.1% in December after a downwardly revised 0.2% gain in November. These so-called core retail sales correspond most closely with the consumer spending component of ⁠gross domestic product. They were previously reported ​to have advanced 0.4% in November.

December's drop ​and the downward revision to November's data could prompt economists to trim their fourth-quarter estimates for consumer spending and GDP.

And yet the DOW Jones Industrial Average hit its third straight record high on Tuesday. Because with Wall Streeters, bad news for the real economy is good news for them, since it’ll be cheaper to take on even more debt.

The weak number appeared to lead to an increase in bets on interest rate cuts from the Federal Reserve. While most traders still expect the Fed to hold steady next month and April, those majorities are shrinking. Meanwhile, over 75% of traders now expect rates to be lower by June.

The consumer data lays the ground for Wednesday's all-important January jobs report, in high focus following last week's signs of softening in the labor market. The latest Consumer Price Index reading is then due on Friday to give a look at inflation pressures, as the Fed continues to balance both sides of its dual mandate.

And based on the flop sweat and excuses from Trump’s Treasury Secretary and other Administration hacks this week, those jobs numbers will likely suck.

Peter Navarro: "The jobs report comes out tomorrow. We have to revise our expectations down significantly for what a monthly job number should look like ... Wall Street has to adjust for the fact that we're deporting millions of illegals out of the job market."

[image or embed]

— Aaron Rupar (@atrupar.com) February 10, 2026 at 8:19 AM

Or, maybe having immigration allows for higher job growth, higher demand and higher economic growth, which tends to help almost everybody. Funny how that concept eludes TrumpWorld.

We also found out on Tuesday that employers have been reducing their raises for employees, with the increase in the Employment Cost Index declining to 0.7% for the 4th Quarter of 2025. Which means the higher wage growth of the post-COVID era has now receded back to pre-COVID levels.

It’s not like the crackdowns in immigration are translating into a boost in wages for those who are left in this country, so throw Navarro's BS to the side. But it does help lead to record profits when prices keep going up by the same amount, so Trump/GOP donors like that part.

But don’t worry, all of those Trump-donating corporations will be using their multi-billion dollars in new tax cuts to hire and pay employees. You know, as soon they get done laying off thousands of the ones they have today.

CBO budget stuff shows deficit was dropping before Tax Scam 2.0 shows up on books

As tax filing season starts, the Congressional Budget Office got their monthly update on how the federal budget is doing. So 4 months in, what do the numbers look like?

That's quite an increase in revenues. What's behind that?

Individual income and payroll (social insurance) taxes together increased by $124 billion (or 9 percent).
• Nonwithheld payments of income and payroll taxes increased by $77 billion (or 33 percent) relative to payments in the same period in fiscal year 2025. Amounts collected so far this year consist of estimated payments of 2025 taxes and final payments of 2024 taxes that were made after the end of the 2024 filing season.
• Amounts withheld from workers’ paychecks rose by $42 billion (or 4 percent), a reflection of rising wages and salaries.
• Individual income tax refunds were $7 billion (or 15 percent) less than during the same period in 2025, boosting net receipts. Most refunds typically are paid during the period from February through May.

Before you say "the newest tax cuts are working!", I'll remind you that we haven’t seen the effect of GOP Tax Scam 2.0 show up much in income tax revenues. That won’t happen until the refunds come in for the next few months, because the Feds are still withholding taxes at pre-Tax Scam 2.0 levels. It's the jump in non-withheld payments that has led to an overall increase in money coming in, and it reflects the continued growth in the stock market that we saw in 2025 (Uncle Sam is not caring if it makes sense for the market to go up).

But we are seeing the difference from Trump 2.0 when it comes to the other main sources of government revenues.

■ Customs duties, including tariff revenues, collected this year were more than four times the amount recorded in the first four months of last year, an increase of $90 billion.

■ Receipts from corporate income taxes decreased by $22 billion (or 16 percent). The enactment of the 2025 reconciliation act allowed corporations to take larger deductions for certain investments in 2025, thereby reducing some estimated payments and offsetting the underlying growth in such receipts.

That increase in tariffs would be around $270 billion at a yearlong, which would keep a lid on an otherwise-rising deficit IF it’s not given away on some Trump/GOP “stimulus check” stunt. Also, keep an eye on the declining tax bill from corporations, and the distortions that may cause for the overall economy (both positive and negative).

On the spending side, the "Big Three" of Social Security, Medicare and Medicaid are all up 8-9% from last year, as is interest on the US debt. But many other parts of the federal government lowered their spending in the first four months of this fiscal year.

The Homeland Security stat is interesting, given all of the deployments by ICE in recent months. But the report indicates that's because FEMA is spending much less on reimbursements for natural disasters than they were in the last four months of the Biden Administration. Read into that what you will...

So before tax filings and refunds began en masse , the US budget deficit was in line to go down in Fiscal Year 2026. But let's check back in four more months, after those refunds have been processed, and see if Trump/GOP Tax Scam 2.0 is starting to have this country bleed even more red ink, and if there's an indication as to who is getting the big refunds, and who's stuck paying the bills.

More layoffs coming and less jobs available. But hey, DOW 50,000!

Late last week, we got a couple of indications that the US jobs market was in rough shape. The first sign came when we found out there was a huge increase in layoff plans by companies.

Layoff announcements ballooned in January, hitting the highest level for the month since 2009, according to a Thursday report from the global outplacement firm Challenger, Gray & Christmas.

That should come as no surprise, given tens of thousands of job-cut announcements in recent weeks from the likes of Amazon, UPS, and Pinterest, as companies claim the need to make room for investments in artificial intelligence, reorient business plans in uncertain times, reduce bureaucracy, or compensate for the rash of pandemic-era hiring….

Indeed, companies' hiring plans, at 5,306 in January, were the lowest for the month since Challenger began logging hiring plans in 2009.

Meanwhile, Challenger tracked 108,435 layoff announcements from US firms in January, more than double the 49,795 cuts announced the same month last year. It was the highest January total since 2009, when 241,749 layoff plans were reported.

Along with the layoffs, later on Thursday we found out that companies haven’t been looking to fill or add positions either.

Job openings dropped in December, widely missing economists' expectations and tumbling to the lowest level since 2020, according to government data released Thursday.

The Job Openings and Labor Turnover Survey (JOLTS) from the Bureau of Labor Statistics — originally scheduled to be published on Tuesday but delayed by the partial government shutdown — showed there were 6.5 million jobs open at the end of December. Economists polled by Bloomberg had projected 7.25 million openings for the month.

Layoffs and discharges, at 1.8 million, increased slightly from 1.7 million a month earlier. The data was collected before recent announcements of sweeping job cuts from firms including Amazon (AMZN) and UPS (UPS).

Not only was December a significant dropoff in openings, but November’s amount of openings was revised down by 218,000 in this report. In addition, the number of openings declined by more than 1.1 million in the last 3 months of 2025.

That’s the lowest non-pandemic amount of job openings since the end of 2017, and down more than 4,300 openings since the end of 2022. Well, I guess there were some people that wanted to bring back the economy of Trump’s first term, and here we are.

And yet, what happened a day after all of this bad jobs news hit?

The Dow Jones Industrial Average (^DJI) led the way higher, surging by about 2.5%, or more than 1,200 points, to climb ahead of the 50,000 level for the first time.

The S&P 500 (^GSPC) rose 2% in its best session since May of last year. The Nasdaq Composite (^IXIC) added about 2.1%, as the indexes bounced back from Thursday's sharp closing losses and a week's worth of selling pressure.

Wall Street is ending the week with a bounce back, as Big Tech CEOs and analysts brushed aside concerns about the impact of new AI tools on legacy tech. The Dow ended the week with a gain of 2.5%, but the benchmark S&P 500 and the Nasdaq closed the week in the red.

Some of tech's biggest names led the charge. Nvidia (NVDA) surged over 8%, while Broadcom (AVGO) and Tesla (TSLA) posted sizable gains. Some tech gloom persisted as Amazon's (AMZN) shares tumbled 7%. In its earnings, the major cloud provider outlined plans for a massive 2026 jump in spending to at least $200 billion, even as its forecast for operating income fell short.

Friday also had the release of the University of Michigan's consumer sentiment survey for February, which had another small increase for the month, hitting the highest levels in 6 months. But even that positive economic news comes with a major caveat.

Hmm, it's almost like the stock market and the jobs market aren't connected to each other. Or worse, the stock market is growing at the expense of the jobs market. Which might be nice for the 0.1%ers that make most of their income off of assets, but isn't so good for the bottom 80%ers who rely on actual work for 93% of their incomes.

WisGOPs decide to that they don't want to lower property taxes OR fund schools!

Legislative Republicans in Wisconsin have never forgiven Governor Evers for his maneuver to guarantee that our state's public schools would be able to use more money every year, and they are trying to find ways to stop it from happening. Let’s start by recalling how this happened.

As passed by the Legislature, 2023 Enrolled Senate Bill 70 (the 2023-25 biennial budget bill) would have set the per pupil adjustment under revenue limits at $325 in 2023-24 and 2024-25, and there would have been no per pupil adjustment in 2025-26 and each year thereafter. The Governor's partial veto modified the language of the per pupil adjustment so that the $325 adjustment would apply from 2023 through 2425. In April of 2025, the State Supreme Court opined that the Governor's 400-year partial veto was consistent with the Wisconsin Constitution.

So right now, we have $325 per student increases to the total revenue limit set to happen each year as long as any of us are around.

The first way that the WisGOPs are trying to keep this from happening is by putting a Constitutional Amendment onto this November's ballot. This measure passed the Senate on an 18-15 party-line vote, and is likely to be taken up by the GOP-controlled Assembly next week, and reads as follows.

In approving an appropriation bill in part, the governor may not create a new word by rejecting individual letters in the words of the enrolled bill, and may not create a new sentence by combining parts of 2 or more sentences of the enrolled bill, and may not create or increase or authorize the creation or increase of any tax or fee.

Seems benign on the surface, and I'd probably vote for it at face value (if you're going to raise/create a tax, a law should say so). But if the WisGOPs think this would have stopped what Evers did, they are WRONG. Because all Evers did is raise the allowable revenue that local K-12 school districts could raise. It didn't do anything to raise or create taxes or fees at the state level.

In addition to the attempted Constitutional amendment, there’s a bill going through where the WisGOP Legislature wants to use more conventional means to stop that $325-per-student increase after the next school year. The Legislative Fiscal Bureau calculated the effect that would have on resources for both public schools and payments for vouchers and charter schools.

Using the 2025-26 revenue limit enrollment of 781,400 pupils for public schools, the bill would reduce statewide revenue limit authority by approximately $254 million annually beginning in 2027-28 compared to current law. The actual effect of the bills in future biennia would depend on actual enrollments and offsets to other revenue limit adjustments related to declining enrollment. If base level funding for general school aids and the school levy tax credit were maintained, this would result in an equivalent reduction in the statewide school levy compared to current law. Changes to general school aid and school levy tax credit funding, as well as changes to other revenue limit adjustments, would also affect school levies in future years.

Providing no per pupil revenue limit adjustment under the bills would also reduce payments and appropriations for the choice and charter programs compared to current law beginning in 2027- 28. The following table shows estimated annual change to the general fund appropriations, offsetting general school aid reductions, and net general fund expenditures for each of the programs under the bills, based on estimated 2026-27 enrollments in the programs.

This feels like a more legitimate way for the Legislature to act, and it allows for the revenue limits to be re-debated with whoever our Governor will be and whoever runs the Legislature.

A $0 increase per student is not good policy, mind you, as costs keep going up in the real world and many schools are already going to referendum because an increase in resources of $325 per student did not prove to be sufficient (even for the lowest revenue limits, the increase is not even 3%). But it at least would be a way to put the solution in writing in a way that sets revenue limits through the normal lawmaking process.

As the Joint Finance Committee debated the bill this week, Dems gave a reminder as to which party decided to let property taxes go up this year.

Rep. Tip McGuire, D-Kenosha, said Republicans had a choice last summer in the budget to put additional state aid into schools to prevent the property tax hikes while ensuring public schools succeed. He accused Republicans of forcing districts to go to referendum to fund basic needs because of their refusal to fund needed costs.

“We have a way to get everyone everything they want, and you keep saying no,” McGuire said.

And the GOP response to that complaint was odd.

Sen. Romaine Quinn, R-Birchwood, said the 400-year veto is bad policy that gives every district the same increase every year, regardless of factors such as enrollment and what they spend now. With some districts spending about $11,000 per child between state aid and property taxes and others spending $18,000, Quinn said a flat increase for each child exacerbates existing inequities.

I’ve read this paragraph a few times, and I don’t know what this means (and I’m not sure Sen. Quinn does either). All districts have the same $325 per pupil increase in revenue limit, and the lower-revenue limit districts get a higher % increase than the higher-limit ones.

Sen. Quinn followed with the mystifying GOP line that having all these referenda are a good thing.

He said referendums are a compromise with education funding in allowing districts to ask taxpayers for additional funds if they believe they need more.

“What Democrats want is to never have to ask taxpayers again,” Quinn said.

That’s true, we shouldn't ask people to have to raise their property taxes to fund their schools. Because if we’d use more state tax dollars to fund K-12 education, WE WOULDN’T HAVE PROPERTY TAXES GOING UP.

Now do I think Governor Evers would actually sign this bill ending rev limit increases after next year? NO WAY. Tony’s not letting that happen while he’s in power.

But it’s good for the WisGOPs to show their hands that their “solution” to the $325 per student increases aren’t to stop property taxes from going up by increasing state aids to pay for that as well as other parts of school funding (which the “far left” portion of the Dem caucus wants to do).

Because WisGOPs really don’t care about the property tax part of K-12 public education, as much as they care about choking off community schools in general, and making them underfunded and ineffective.

I think the average Wisconsinite would prefer to have lower property taxes, fewer referendums, and adequately-funded public schools. But if GOPs want to go ahead and run on “we’re happy with how schools are funded in Wisconsin….and we want your community schools to be starved even more!”, please proceed, dipshits. It’ll likely go over as well as the Moms for Liberty candidate in Texas who just lost a Trump district in their State Senate by double digits last weekend.

ADP report shows another month with few jobs gained

With the short government shutdown of this week pushing back the Bureau of Labor Statistics’ jobs report until next Wednesday, the ADP payrolls survey got some extra attention (today). And for the first month of 2026, the ADP report served up a familiar story – anemic job growth.

US private employers added fewer positions than anticipated last month, according to the private payroll processor ADP, starting 2026 off on a downbeat note.

Private payrolls grew by just 22,000 in January, ADP said Wednesday, below economists' expectations of 45,000 positions….

"Job creation took a step back in 2025, with private employers adding 398,000 jobs, down from 771,000 in 2024," ADP chief economist Nela Richardson said in a statement. "While we've seen a continuous and dramatic slowdown in job creation for the past three years, wage growth has remained stable."

Manufacturing helped lead the slowdown with a drop of 8,000 jobs in January, according to ADP, less than one year out from President Trump's sweeping tariffs and promises to restore positions to the sector. Professional and business services also continued to decline, while construction added roles. Losses across the economy would’ve appeared even more stark if not for the healthcare and education sectors posting positive growth, with 74,000 new positions gained in January.

In addition, UW-Madison’s Menzie Chinn notes that ADP’s listing of 398,000 private sector jobs in 2025 was a significant downward revision from what had been previously reported, and those revisions say private sector jobs declined for 4 straight months between February and June before having a slight recovery in the 7 months since then.

And one sector that was a significant job-loser in 2025 was in manufacturing, which has been shedding jobs in numerous surveys since the start of 2023, and continued to slide last year.

One reason the BLS’s job report was set to get extra attention this week was that it would also include their annual benchmark revisions for jobs numbers. Based on information from the “gold standard” Quarterly Census of Employment and Wages (QCEW), it looks like the “official” jobs numbers are going to end up quite a bit lower than what was originally reported – and those numbers are already the worst in a non-COVID year since (2010?).

Now we have to wait until next week for that report to hit, which will seem to extend the bad jobs news beyond Friday. Everyday people already think this is a rough jobs market with wages barely keeping up with costs, which helps explain why US consumer confidence plummeted to its lowest level in 12 years last month.

But bits of data are always welcome for me to show whether this gloominess is just bad vibes about the repressive dimwits running our country, or if there’s something in the real economy that is driving those feelings. And if the strong “economic growth” numbers that may be reported end up being concentrated in a few industries with the benefits only going to a privileged few.