Retail Sales Slump

Financial FAQs

“Retail trade sales were virtually unchanged (±0.5 percent)* from November 2025, and up 2.1 percent (±0.5 percent) from last year. Nonstore retailers were up 5.3 percent (±1.4 percent) from last year, while food service and drinking places were up 4.7 percent (±1.8 percent) from December 2024.” Census Bureau

FREDretailsales

This FRED graph shows best what tariffs have done to consumer spending, which powers 70 percent of economic activity, let us not forget. Retail sales fizzled in December as I feared would happen in my November retail report, rising just 2.1 percent annually. And retail sales don’t take inflation into account, so consumers weren’t keeping up with the rising prices.

Sales had declined or were barely positive in six of 11 months through November 2025, I said then. So why wouldn’t consumers turn even more cautious with almost no new payroll jobs. The latest Labor Department JOLTS report showed that as many people were leaving jobs as were hired—so zero net new jobs were added to the workforce, in other words.

This means the economy is steadily shrinking for most Americans because of the disastrous and largely ineffectual tariff policies that have increased import taxes, therefore higher inflation, the opposite of Trump’s promise to bring down prices on ‘Day One”.

The FRED graph shows just how consumers timed their purchases with the tariffs. Sales had plunged in May when the April 2 retaliatory tariffs were announced on all 180 countries in the world, some mostly inhabited by birds. Then Trump’s TACO tactics kicked in postponing them for 60 days, then raising them again when countries refused to meet his deadline for deals.

Also, November was the last month consumers splurged for the holidays so annual sales dropped from 3.1 percent to just 2.1 percent in just one month, when annual retail sales usually increase from 3-6 percent in good times.

My guess is that the AI build out of new energy centers won’t help inflation for a long time, if ever, or create many jobs in the near future, So Trump is saying we must lower interest rates to boost some growth and keep consumers happy. But inflation may not behave since concentrating so much wealth in AI investment with little return to show for it in the near term, may raise inflation.

Or, what will consumers ultimately do if Trump can’t stop playing the tariff game in his attempt to twist arms to achieve his ultimate goal of dominating friends and neighbors rather than cooperating with them?

The Trumper bet is that this year will bring more consumer benefits with the Fed’s new Chairman in May wanting to push interest rates lower as well as the tax breaks in Repub’s Big Beautiful Tax Bill.

In Nobel economist Paul Krugman’s words, “So am I saying that the argument that AI justifies rate cuts is dishonest, that AI has become the last refuge of scoundrels? Why yes, I am.”

So what could go wrong?

Harlan Green © 2026

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Why the job Losses?

 Popular Economics Weekly

“The number of job openings continued to trend down to 6.5 million in December, the U.S. Bureau of Labor Statistics reported today. Over the month, both hires and total separations were little changed at 5.3 million each. Within separations, quits (3.2 million) were unchanged while layoffs and discharges (1.8 million) were little changed.” BLS

FRED/JOLTS

The Labor Department’s JOLTS report is another survey showing little or net job growth. That happens when the number of layoffs equals the number of hires (both hires and total separations—losses—were 5.3 million in December).

Alarm bells are ringing because it was the last this low during the worldwide economic COVID-19 pandemic (January 2021).

So now we must wait for the postponed official U.S. Labor Department unemployment report to know if we are slowly sinking into a job recession.

But workers can already see what is happening with their own eyes rather than listen to White House bromides that the economy must eventually get better. The private outplacement firm Challenger, Gray & Christmas said U.S.-based companies announced 108,435 layoffs in January, up sharply from the prior month. It was the biggest tally for the month of January since 2009.

“Generally, we see a high number of job cuts in the first quarter, but this is a high total for January. It means most of these plans were set at the end of 2025, signaling employers are less-than-optimistic about the outlook for 2026,” said Andy Challenger, workplace expert and chief revenue officer for Challenger, Gray & Christmas.”

It is up 205% from the 35,553 job cuts announced in December. January’s total is the highest for the month since 2009, when 241,749 job cuts were announced. It is the highest monthly total since October 2025, when 153,074 cuts were recorded.

There’s another reason companies have stopped hiring more workers than they are losing. They are waiting for the Supreme Court decision on whether the tariffs are legal that are making many of their products more expensive.

Trump’s executive orders are not laws, unless approved by congress. And congress has said they can be enacted if there’s a national emergency. A scarcity of strategic metals is an emergency whose imports can be taxed, but not coffee and every other product that Americans use every day because Trump doesn’t like that particular government.

What are the other culprits preventing job creation? Artificial Intelligence (AI) was cited for 7,624 job cuts in January, 7% of total cuts for the month. Companies referenced AI for 54,836 announced layoff plans in 2025. Since 2023, when this reason was first tracked, AI has been cited in 79,449 job cut announcements, 3% of all layoff plans announced in that period.

“It’s difficult to say how big an impact AI is having on layoffs specifically. We know leaders are talking about AI, many companies want to implement it in operations, and the market appears to be rewarding companies that mention it,” said Challenger.

Tariffs were cited for 294 job cuts in January, after causing 7,908 cuts in 2025.”

That is more sobering news. What will happen to the workers being laid off? Trump has cut back or cancelled many of the infrastructure programs that President Biden enacted in the Infrastructure, Inflation Reduction and CHIPs Acts that would employ these workers in sectors that are intended to modernize our economy.

But no, Trump wants to return to a fossil-fueled economy that is no longer growing (and is in fact losing workers). Republicans don’t seem to have a clue to the horrendous damage he is doing in turning back the clock to a distant era that no longer exists. It was called the Gilded Age and existed in the 1890s.

But the stock market is rallying to record highs with the DOW up 1200 at this writing. Yes, that's all due to the capital spending for new AI infrastructure. But it's creating jobs for robots, not humans.

Back to the 1890s? That can’t be done either, of course, and Americans are already seeing the results.

Harlan Green © 2026

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Where Are the Jobs--Part II?

 Financial FAQs

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

FREDpayrolls

The FRED (St. Louis Federal Reserve) graph tells it all. Job formation has almost disappeared in the Trump economy. It’s not only the shutdowns, which have delayed the official U.S. unemployment report that was due for January, but past months as well, so private payroll data processors like ADP fill in the knowledge gap.

But we know from the latest FRED graph of private payroll hiring that private employers are barely hiring. Just 74,000 jobs were created in November 2025 and 22,000 in January, as reported by ADP.

So the GDP growth spurts last fall 2025 are from the $ trillions being invested in AI energy centers, not in corporations expanding their workforce. Corporations are laying off workers instead.

The best examples are Amazon and now the Washington Post. The NYTimes just reported that the Washington Post told employees on Wednesday that it was beginning a widespread round of layoffs “that are expected to decimate the organization’s sports, local news and international coverage.

“The company is laying off about 30 percent of all its employees, according to two people with knowledge of the decision. That includes people on the business side and more than 300 of the roughly 800 journalists in the newsroom, the people said,” said the NYTimes

CBS News reports that in 2025, companies directly pointed to their use of AI in announcing 55,000 job cuts — more than 12 times the number of layoffs attributed to AI just two years earlier, according to outplacement firm Challenger, Gray and Christmas. Of those job losses, 51,000 were in tech, with most of the cuts concentrated in tech-heavy states such as California and Washington.

The main culprit are the tariffs that Trump is using to coerce concessions from foreign governments, but it is doing the most damage to Americans. U.S. vehicle sales plunged in January, for example. Automobile sales increased at an annual rate of 14.9 million in January, down 7% from 16.1 million in the final month of 2025, according to Wards Intelligence and profit losses of $billions have already been reported by GM and Ford due to the higher tariffs on aluminum and steel.

Consumers above all are reacting to the sudden changes in the employment picture. The Conference Board voiced their concerns in the headlineConfidence collapsed to lowest point since 2014, surpassing pandemic depths: “The Conference Board Consumer Confidence Index® fell by 9.7 points in January to 84.5 (1985=100), from an upwardly revised 94.2 in December. A 5.1-point upward revision to December’s reading of the Index resulted in a slight increase last month, reversing the initially reported decline. However, January’s preliminary results showed confidence resumed declining after a one-month uptick.

So unemployed workers are now suffering under both the rising inflation from the tariffs and AI replacing many of their jobs.

It’s not a pretty picture, while we are still waiting for the Supreme Court to rule on whether most of Trump’s tariffs are even legal. It much safer to do nothing in such circumstances—consumers to hold on to their savings and employers to replace their workers with more technology.

Harlan Green © 2026

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

President Trump the Bully

 Answering Kennedy’s Call

 “With yesterday’s tragic news, we are calling for an immediate deescalation of tensions and for state, local and federal officials to work together to find real solutions.” Letter signed by 60 Minnesotan CEOs

CNBC.com

It has taken the ICE killings of Renee Good and Alex Pretti for Minnesotan CEOs — among the most powerful and wealthiest Americans, says CNBC — to cause President Trump to blink, to back down from the Storm Trooper tactics of his immigration police in Minneapolis.

Minnesotans and the American public are learning how to counter what they are seeing with their own eyes, the real Donald Trump. His actions and those of his followers are the behavior of bullies, led by a megalomaniac with a very limited attention span and unlimited need for attention in the words of Mary Trump, his niece and a Clinical Psychologist, whose single-minded purpose is to gather as much wealth and power to himself as possible.

     It is a bully mentality that has infected Trump’s MAGA followers and leaders of the Republican Party as well, which sometimes takes tragedies such as happened in Milwaukee to open our eyes. There is little mystery to his actions.

Donald Trump’s success in business, such as it is, was due to his bullying tactics that browbeat investors and lenders to such an extent that he could no longer rely on U.S. investors and banks to finance his projects, but came to rely on Russian oligarchs instead who needed to hide their wealth from the Russian people.

Such a mentality has led to increased bullying in schools since the COVID-19 pandemic, and even gun violence. It is a mentality that attempts to impose a bully's version of reality on the real world for the sole purpose of domination.

Evidence of Trump's bullying behavior also comes from the exaggerated use of his hands, which is the body language and mannerisms of a bully reports Groff Beattle, a professor of Psychology at Edge Hill University who specializes in gestures,.

Also comments such as "mentally sick", "dummy", "looser" or "looked disgusting" are all examples of bullying language on Trump's Truth Social site. Furthermore, he has mocked the disability of reporter Serge Kovaleski, portrayed immigrants and foreigners as dangerous people, rapists or "criminal aliens", and demonstrated a significant lack of respect for women generally.

How does one oppose such destructive behavior? First, remember that bullies will prey on the weakest, and avoid confrontation with those stronger because of their own insecurities. Trump preyed on naïve students and the elderly in his Trump University scam. And he stiffed workers and employees when building his Trump Casinos either by paying them less than was contractually agreed to, or not at all via numerous bankruptcies.

It is a lesson NATO members at DAVOS have just learned that is being reflected in their speeches as they search for other countries to move their businesses.

Combine it with what many Psychologists have termed Trump’s Malignant Narcissism, a particularly dangerous form that means he will do anything, break any law to get his way.

Trump is now supporting Central and South American regimes backed by drug cartels in pardoning former Honduran President Juan Orlando Hernandez, who was serving a 40-year sentence for drug trafficking.

In standing up to what has proven to be a soulless, amoral administration Minnesotans are fighting for more than their own state, they are fighting to prevent a world that President Trump and his oligarchs want to restore in South and Central America for their own benefit by supporting right wing narco-states that have as little regard for life.

Harlan Green © 2026

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

A Better Economy for Whom?

 Financial FAQs

“Real gross domestic product (GDP) increased at an annual rate of 4.4 percent in the third quarter of 2025 (July, August, and September), according to the updated estimate released by the U.S. Bureau of Economic Analysis. In the second quarter, real GDP increased 3.8 percent.” BEA.gov

FREDgdp

The U.S. economy is growing again. Why, when polls show that a majority of Americans are unhappy with the economy and their standard of living? Because this measure of growth doesn’t answer what every day Americans need.

The U.S. standard measure for overall economic health, Real Domestic Product (GDP), grew in the second and third quarter of 2025, despite the inflation surge from President Trump’s tariffs. In fact, rising inflation is probably boosting growth at the top for major corporations because higher prices usually mean higher profits for businesses, (but not consumers).

Q3 GDP growth increased in part because consumers could continue to spend. Spending was up 3.5 percent. This is despite the higher tariffs on almost all imports entering the U.S, which caused the GDP measure of overall inflation to rise 3.4 percent, which is too high.

GDP growth is soaring at the moment for a chosen few, in other words. But most Americans are unhappy with the high prices and inflation tied to tariffs. They no longer believe Trump’s fiction that exporters or Americans will eat the cost of the price hikes from the tariff taxes.

The Fed’s preferred inflation gauge, known as the Personal Consumption Expenditures (PCE) index, also rose to a yearly rate of 2.8% in November, said the Bureau of Economic Analysis. That was up from 2.7% in October with the 12-month rate of core inflation up to 2.8% in November from 2.7%.

So will consumers continue to spend as much going into the New Year? We already know that most consumers are in a very sour mood. The Conference Board’s latest Consumer Confidence survey headline said it best: Confidence collapsed to lowest point since 2014, surpassing pandemic depths.

“Confidence collapsed in January, as consumer concerns about both the present situation and expectations for the future deepened,” said Dana M Peterson, Chief Economist, The Conference Board. “All five components of the Index deteriorated, driving the overall Index to its lowest level since May 2014 (82.2)—surpassing its COVID-19 pandemic depths.”

That is alarming, needless to say. Year 2014 was when confidence was even lower than even the COVID-19 confidence deaths because it was during the Republican’s “no compromise” government shutdown that was meant to oppose President Obama’s agenda of improving ordinary American lives via such programs as Obamacare. It was for more than 30 days—what was then the longest shut down in history.

Is this a repeat performance should congress not agree on a new budget before the end of February?

Exports also helped to boost growth because they have been increasing as well. This might be because of higher labor productivity, i.e., fewer workers are producing more. Amazon has announced it is planning to lay off 30,000 corporate employees, for instance. AI is already replacing workers in industrial and transportation industries, hence the low hire rate being seen after last October’s government shut down. All eyes will be on the labor market in upcoming months.

With only 50,000 new payroll jobs in November, Americans are frustrated by the difficulty in finding jobs. Some also mentioned more costly healthcare and insurance as well in the Confidence Board survey.

And now the blatant lies of President Trump in his attempt to cover up the murders of American citizens by ICE in Minneapolis is sowing even more chaos. No country can continue to grow for long amid such uncertainty.

The high GDP growth numbers and record Wall Street stock indexes won’t convince most Americans that all is well when they see the opposite with their own eyes. That is not the way to run a country, as I’ve been saying.

Harlan Green © 2026

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Will Consumers Recover?

Financial FAQs

“Retail trade sales were up 0.6 percent (±0.5 percent) from October 2025, and up 3.1 percent (±0.5 percent) from last year. Nonstore retailers were up 7.2 percent (±1.2 percent) from last year, while food service and drinking places were up 4.9 percent (±1.8 percent) from November 2024.” US Census Bureau

FREDretailsales

Retail sales were choppy in 2025, to say the least. Even the slight uptick in November after two months of contraction won’t stop President Trump’s wholesale destruction of the U.S. economy.

Sales declined or were barely positive in six of 11 months through November 2025, per the FRED graph of monthly retail sales and the future doesn’t look brighter for most Americans.

Suffering consumers and businesses have tried every which way to avoid the higher prices from Trump’s TACO tariffs (Trump Always Chickens Out) that can change on a whim and cause consumers to pull back their spending in the face of sharply rising prices caused in large part by Trump’s economic policies.

Or avoid rising insurance costs because Republicans won’t subsidize insurance premiums for some 20 million low-income Americans.

We report retail sales because it comprises approximately half of consumer spending and consumers support some two-thirds of economic growth. So consumer behavior is closely watched by economists attempting to predict the future.

But President Trump’s single-minded policy of levying import taxes on most of the world by fiat—to lower the trade gap between imports and exports which he claims is unfair—is not a good way to do business or run a country. And it continues the wholesale destruction, both at home and of our foreign alliances.

Take Trump’s return to “Drill baby drill” policies, for instance, that are not only causing Detroit automakers to lose $trillions in having to switch back to combustion engines but make more people sicker from the increased air pollution that we thought we had conquered with the EPA’s Clean Air Act.

Ford Motor has just announced a $19.5 billion charge to restructure its EV (Electronic Vehicle) and GM $7.6 trillion in losses over the past two quarters because of Trump’s war against electric vehicles, losses from higher tariff taxes on parts that go into its manufacture and removal of purchase incentives to buy EVs.

It’s hardly a surprise that many of Trump’s executive orders are ad hoc; not only meant to pay for the huge tax cuts in the Big Beautiful Tax Bill that have run up a record federal debt but to coerce our allies to pay for his empire building, such as levying 25 percent tariffs on NATO members that say they will protect Greenland from military seizure.

The question will be can consumers continue to shop in the face of so much chaos, with fewer entering the workforce? Less the half the number of jobs are being created monthly since last Fall’s government shutdown.

The Fed’s January Beige Book on the current state of our economy summed it up. Rising costs are the main elephant in the room.

“Cost pressures due to tariffs were a consistent theme across all Districts. Several contacts that initially absorbed tariff-related costs were beginning to pass them on to customers as pre-tariff inventories became depleted or as pressures to preserve margins grew more acute.”

Consumers are becoming very nervous in the face of such an unknown future, a future that depends on the actions of a man who can willfully destroy an economy to further his own interests.

Harlan Green © 2026

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

This inflation Isn't Going Away

Popular Economics Weekly

“The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent on a seasonally adjusted basis in December, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 2.7 percent before seasonal adjustment.” BLS.gov

FREDcpi

It’s no surprise that CPI inflation is still high—up +2.7 percent in a year. And I fear it can’t come down for ordinary Americans, at least, without another recession.

The gap in the graph shows why. In was in part because of the government shutdown when congress couldn’t agree on insurance policies that would bring down health care costs. And prices are rising elsewhere, especially in groceries and other everyday items without a Federal Reserve and regulatory agencies (such as the Consumer Financial Protection Bureau) able to do their job.

The inflation data gap is therefore the most important item in the CPI report. The ignorance of upcoming data could breed more inflation, especially during the ongoing wars; both domestic (tariffs), foreign (Ukraine), and Trump’s threat to fire more government statisticians he doesn’t like.

Why? Because it creates supply chain shortages, and there’s the upcoming budget battle for the full fiscal year. What if there’s another shutdown in February because congress can’t agree on a full year’s budget?

We know that data lapses increase the possibility of more bad news, which breeds only more economic uncertainty. That’s what businesses are fearing, and so not hiring more employees or knowing what to plan for the future.

And who takes the most advantage of the data blackout? Supermarkets that can sneak in higher grocery prices. That’s a main reason for soaring food costs that have risen +3.1 percent in the CPI report—in double digits for some products like beef and coffee. And don’t forget the ICE arrests of agricultural workers that farmers are complaining about and I mentioned last week that are contributing to the food shortages.

Electricity costs are up +6.7 percent, as well. These are the everyday items that make consumers unhappy. And why not? Candidate Trump promised to bring down prices on “day one” of his second term, and Americans are no longer believing him.

USA Today reported that the New York Times' Dec. 23 average, which includes the Gallup numbers, found Trump had a 42% approval and 54% disapproval ratings. RealClearPolitics' daily average is similar, at 43% approval and 53% disapproval.

USA Today also cited Gallup’s Economic Confidence Index, which summarizes Americans’ evaluations of current economic conditions and their perceptions of the economy, hit -33 in the recent poll. It marks a 10-point decrease from October, and a 19-point dive from June's numbers. It has a theoretical range of -100 to +100, says USA Today.

Can prices come down this year? No, unless there’s a recession, as I said. My biggest fear is a repeat of the last two busted asset bubbles created in part by lax regulations that created more wealth for its wealthiest supporters and took away the protections for ordinary Americans.

Trump’s new Federal Reserve Chairman in May will continue to push down short-term interest rates, which will only create higher inflation, as did former Fed Chair Allen Greenspan to finance the GW Bush terror wars in early 2000. Memories are short in the financial world.

It created massive asset bubbles and ultimately the Great Recession, as the AI buildout is doing today that will create an oversupply that ultimately outdistances demand, which always happens. People forget that it was the busted Dot-com asset bubble in 2000 followed by the housing bubble that led to the 2008-09 Great Recession.

And ordinary Americans ultimately pay the price of such battles—domestic or foreign.

Harlan Green © 2026

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen