What Scares Americans--Part II?

Popular Economics Weekly

“Overall, sentiment for lower-income consumers and those with smaller stock portfolios dropped steeply this month, groups that have fewer resources to weather increases in prices. Frustration over cost-of-living continues to mount, as consumers across the political spectrum believe that the trajectory of the economy has weakened since the beginning of the year.”

FREDUMichsurvey

President Trump’s attempts to bully Americans into accepting his policies aren’t working as we approach the midterms. It’s not surprising because of who he has chosen to fill his administration, bullies, usually with little knowledge of the law and lower IQs, lower than his own (100?).

It amounts to planned terror, against not just the undocumented but whole communities who fear that even legal immigrants might be rounded up, legal citizens shot, and American citizens losing their vote.

How else do we explain actions that don’t match Trump’s words: policies that raise inflation and shrink energy supplies, shrink world trade and raise our prices, cut healthcare and grow disease outbreaks, and start wars instead of preventing them?

Those who’ve been hurt most are also own supporters. The University of Michigan is the latest to report Americans’ unhappiness with Trump’s economy.

The sentiment survey headline index fell to 46.3 in its preliminary October reading from 48.1 in September, according to its latest data. This is when it averaged close to 100 during President Biden’s and Trump’s first term.

The survey highlights that the most unhappy in the above U Mich graph were Independents(black bar) and the bottom Tercile one-third with no stocks(green bars).

No wonder. The September unemployment report showed just 29,000 payroll workers hired, averaging just 45,000 jobs per month in the last year.

Why does he enable the failures? Perhaps the best example is his double-speak. Rather than admit he can’t answer a question, he lies, or he finds someone else to blame.

He is living in an economy he doesn’t understand, a holdover from the first Gilded Age of corruption with its robber barons and scandals.

He can’t grow an economy with illegal tariffs, unpopular wars, and broken treaties. His policies are finally coming home to roost as the saying goes, with record unpopularity so close to the midterms.

Add to this his stated attempt to ‘purify’ the American electorate to be as white as possible, allowing the killing of undocumented workers in doing so.

It amounts to terror, using armed and masked ICE officers to terrorize legal and illegal immigrants is perhaps the most obvious attempt to mimic Hitler Brownshirt’s roundup of Jews in the leadup to WWII.

These are very much acts of domestic terrorism. And most of Trump’s Billionaires want unregulated A.I. to grow as well. Who will make the decisions then?

Harlan Green © 2026

• Follow Harlan Green on Twitter: https://x.com/HGreen97180

What Scares So Many Americans?

Popular Economics Weekly

"The only thing we have to fear is fear itself—nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance." FDR

President Roosevelt understood in his 1933 inaugural speech, “The only thing we have to fears fear itself…” the horrific fears of Americans at the beginning of the Great Depression; the paralyzing feelings that things could only get worse.

I believe many Americans are just as scared today. It’s not only because of the worldwide COVID-19 pandemic that affected the world in many similar ways to the Great Depression. And it explains why American voters could twice elect Donald Trump, a convicted felon and known sexual predator, as president.

Our government is based on a capitalist system that generated a 25 percent unemployment rate and long bread lines. It failed to care for the many Americans who couldn’t adopt to a new industrial world of mass production and mass markets that caused the Great Depression

Such overwhelming fear pervades much of American life today—that has generated our record number of gun holders and incarcerated citizens, as well as record income inequality with the top 1% income earners owning as much as 90% of the population. The gap between haves and have nots is the worst in the developed world.

Roosevelt’s New Deal was the answer in the 1930s by literally putting Americans back to work on the government’s tab who couldn’t find work on their own in programs that would benefit all Americans, such as the WPA that built many of our dams and bridges, and CCC that preserved our national parks.

It protected those who worked with workman’s compensation when they lost their job, the 8-hour day, and gave labor unions the right to negotiate with their employers.

But Donald Trump, because of his innate cruelty and utter disregard for the laws and constitution, was able to convince many Americans that immigrants, gays, a weak military, inferior races were to blame for their poverty.

Perhaps Democrats today would have better understood how much such events as the COVID-19 pandemic had paralyzed Americans and the world in a similar way—if there had been another Roosevelt instead of Donald Trump.

FREDUMichsurvey

The FRED graph of the University of Michigan sentiment survey shows when Americans became most fearful; in the sharp decline in positive feelings that began in January 2024 at the beginning of Trump’s second term; when he began to almost completely ignore the laws of the land and the constitution.

How do ordinary wage earners that comprise most Americans conquer their fears,“convert retreat into advance” without another Roosevelt?

Reverse the economic policies that took away so much of their wealth and driven so many into poverty, for starters. Raise the national minimum wage $7.25 per hour that hasn’t changed since the 1990s.

Then reverse the massive tax cuts enacted that began in the 1980s for both the highest earners and corporations that have saddled American taxpayers with $40trillion in national debt. It’s been done before.

It can be done by understanding Americans’ dreams, instead of exploiting their fears.

Harlan Green © 2026

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

Why the Employment Mystery?

 Popular Economics Weekly

“Both nonfarm payroll employment (+29,000) and the unemployment rate (4.2 percent) changed little in September, the U.S. Bureau of Labor Statistics reported today. Employment in all major industries changed little over the month.” BLS.gov

FREDpayrolls

September’s U.S. official unemployment report was a disappointment—just 29,000 jobs were added vs. +133,000 jobs in August. But that may not be a sign of a weakening labor market.

It should be obvious that the labor market is at the beginning of another recovery with the massive acceleration in government and A.I. spending that eclipses any prior era by $Billions.

The new chip factories and data centers are being built over time. It may be another decade before we will see definitive results in job formation and GDP growth, as happened in prior technological revolutions, such as for computer and the Internet use to spread.

So it’s difficult to see the changes, contrary to the Bureau of Labor Statistics report, or even the final employment numbers. For instance, after losing -10,000 jobs in July, mainly because of supply disruptions from Trump’s Iran blockade, payroll formation was originally reported to be 162,000 jobs in August then reduced to 133,000 hires in its latest revision.

And I’m guessing that September new jobs will probably be revised upward from 29,000 jobs, given that it’s hard to estimate September because totals include seasonal back to school and government hires that aren’t known immediately.

So, all that investment must eventually grow the job market as well. Steve Ratner, Morning Joe’s resident economist, said in a NYTimes opinion piece that we could already be seeing its impact; the labor markets are beginning to hire more technical professionals because of it.

“To date, A.I. has killed a number of jobs but boosted employment for plumbers, electricians, data scientists and market research analysts”.

Manufacturing may be the biggest story. Manufacturing employment was little changed in September (+9,000) but is up by 72,000 since a recent low in December 2025.

And the Institute of Supply Management’s manufacturing index of new orders climbed 1.6 points last month to a robust 55.3%. It means a majority (55.3%) of supply managers report more new orders. Some manufacturers are even hiring for the first time in a few years. Job creation was positive for the third straight month, following a 33-month streak of declines.

So the low September payroll total may be a temporary glitch.

And GDP growth has already been revised upward in the past two quarters. Q1 2026 GDP was bumped up from 2.0 to 2.2 percent and Q2 from 1.5 to 2.5 percent. And there are +3 percent predictions for Q3 growth.

But all that activity is blowing up inflation. The price index for gross domestic purchases increased 5.6 percent in the second quarter GDP number, revised down 0.2 percentage point from the previous estimate.

This means there will be another Fed rate hike, but maybe after the November election, which is the tradition so as not to be seen as influencing voters.

“Total nonfarm payroll employment changed little in September (+29,000), following an average monthly gain of 45,000 over the prior 12 months.

Health care employment continued its upward trend in September (+17,000), but at a slower pace than the average monthly gain over the prior 12 months (+33,000).

Will the employment picture improve with literally $Trillions going into the economy? More importantly, will it improve consumers’ confidence in their own future, which has been in the dumps? They have to believe it will for that to happen. A.I. robots won’t do it.

That is the conundrum, as former Fed Chair Greenspan would say.

Harlan Green © 2026

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

Consumers Breakout For Holidays

 Financial FAQs

“Personal income increased $66.6 billion (0.2 percent at a monthly rate) in August, according to estimates released today by the U.S. Bureau of Economic Analysis (BEA). Disposable personal income (DPI)—personal income less personal current taxes—increased $68.6 billion (0.3 percent), and personal consumption expenditures (PCE) increased $190.8 billion (0.9 percent).” BEA.gov

I said last week better economic growth depends on the consumer to keep shopping despite the higher inflation and Federal Reserve actions that raise consumers’ cost of living. And there may be at least one more +0.25 percent hike this year.

And rising prices haven’t stopped consumer spending yet. The Federal Reserve’s main consumer measure, the Personal Consumption Expenditure Index (PCE), shows consumers shopping more; maybe because they haven’t run out of savings and want to enjoy the holidays and Christmas?

The jury is out on why they continue shopping. Tariffs and the Iran blockade haven’t stopped them yet, just made it more expensive. But they are depleting their savings because personal incomes, mainly wages, aren’t keeping up with the rising prices.

So what are consumers buying says the PCE? Just about everything they need; motor vehicles, energy (gas, diesel fuel) in the face of higher prices, to no one’s surprise.

A big jump in employment (+162,000) last month may also have encouraged consumers to be braver. This month’s unemployment report could be a repeat.

Continued economic growth will also depend on the rest of the economy, of course. Most business investment is with the military and A.I. construction but that won’t help consumers, whose spending makes up two-thirds Gross Domestic Product growth.

Construction also surging because of the A.I. build out, for instance. That shows in the S&P Manufacturing Index growth.

“This week’s flash PMI surveys pointed to a sharp acceleration in US activity. The S&P Global US Composite PMI rose from 56.0 in August to 58.4 in September, its strongest reading since July 2021. Both manufacturing and services strengthened, while employment growth accelerated and business costs picked up. S&P Global described the combination as a distinctly hawkish signal for interest rates.”

This is also could better the mood of consumers. But that’s not enough to sustain their spending for long. The Trump administration has cut back other programs, defying congressional mandates, that would benefit consumers and thus boost longer term growth.

That won’t happen as long as Trump viciously cuts more of the healthcare, education, and environmental protection programs. And the immigration crackdown is depleting many of the service sector jobs that immigrants populate.

We can also say the 7 percent plus fixed mortgage rates have stopped the housing sector in its tracks, further shrinking growth potential.

But consumers might as well make the most of these holidays as long as the good times last!

Harlan Green © 2026

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

A 'Hard Landing'?--Part II

 Popular Economics

“The number of job openings was little changed at 7.1 million in August, the U.S. Bureau of Labor Statistics reported today. Hires changed little at 5.2 million, while total separations were unchanged at 5.1 million. Within separations, quits (3.1 million) were unchanged, while layoffs and discharges (1.6 million) were essentially unchanged.” BLS.gov

FREDjolts

Will the federal Reserve engineer a hard or soft landing in this new rate hike cycle just beginning? A soft-landing is possible, but something has to be done about the rapid rise in interest rates.

The last time the Fed acted to tame inflation was during the post-COVID-19 pandemic recovery when CPI inflation had reached 9 percent.

But it worked. There wasn’t another recession and the economy has had five years of continuous growth since then, in large part because of the bipartisan recovery aid, including personal checks paid to almost all Americans.

More than $5Billion was invested in the recovery from the worst recession since the Great Depression.

Can the Fed do a repeat performance under new Fed Chair Kevin Warsh, an actual economist?

The just released JOLTS report shows that better economic growth is ahead, even with the Fed’s first rate hike since 2024. The actual unemployment report is due and will give more clues—such as whether hiring picks up.

So the hard landing scenario—which is an engineered recession when the Fed holds interest rates too high for too long--I believe is less likely, even though bond interest rates are the highest in 20 years; a danger single that credit conditions are tight for both businesses and consumers.

The Jobs Openings and Labor Turnover survey shows the number of job openings has been gradually increasing from its low of 6.55 million openings last December and is now 7.1 million.

There were 5.2 million hires and 5.1 million separations (i.e., quits), thus approximately 100,000 net new jobs were possibly created in August. This should be positive news for the upcoming August unemployment report.

If higher job formation continues, consumers will spend more despite the Fed’s actions to raise their higher borrowing costs. Consumers aren’t feeling good about the cost of anything since the Iran war.

They will need a confidence boost. They aren’t very happy per the latest Conference Board survey.

“The Consumer Confidence Index deteriorated notably in September, following two prior months of softening,” said Dana M Peterson, Chief Economist, The Conference Board. “The Present Situation Index fell sharply, while the Expectations Index slipped further into negative territory.”

But higher job creation numbers might do the trick and allow a soft landing, especially if the A.I. build out will create the good jobs that are needed to run the new economy.

Harlan Green © 2026

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

More Economic Growth?--Part II

Financial FAQs

“Real gross domestic product (GDP) increased at an annual rate of 1.5 percent in the second quarter of 2026 (April, May, and June), according to the second estimate released today by the U.S. Bureau of Economic Analysis (BEA). In the first quarter, real GDP increased 2.1 percent.” BEA.gov

FREDgdp.

I don’t believe a recession is near, I said last week. The five-year cycle of economic growth begun with the recovery from the Covid-19 pandemic could continue.

For how long? The longest growth cycle to date was during the Obama and Trump I administrations—2009 to 2020 (see above graph). And that was because of the massive government spending to bring U.S. out of the 2008-09 Great Recession.

This is despite Trump’s economic wrecking ball that has reduced nonfarm payroll formation to just 31,000 per month over the past year and canceled or reduced many of President Biden’s bipartisan bills that boosted investment in infrastructure, healthcare, environmental protection, and healthcare services.

And what about the Fed’s rate hike(s)? Barron’s Randall Forsyth reports that interest rate markets believe the Federal Reserve risks causing a recession, or stagflation at least, by raising its Fed Funds rate +0.25 percent one to two more times to fight very stubborn inflation.

That is why economic growth slowed to 2.1 percent and 1.5 percent in Q1 and Q2 this year that the Fed could further damage because of its hawkish rhetoric on inflation.

But something remarkable is happening that could pull Americans away from the precipice. The Atlanta Fed’s GDPNow estimate of third quarter GDP growth is 5.1 percent for the second consecutive month, above most economists’ predictions.

Why? Consumers and governments are on a spending spree, and some $800B is being invested in the construction of A.I. data centers blanketing the country where many Americans don’t want them.

This is while corporations have record profits, which will extend the record stock market run whose prices are already in nosebleed country. The Price-to-Earnings ratio of the S&P 500 is 28 to 1, already far above its long term 15 to 1 historical ratio, according to economist Robert Shiller of irrational exuberance fame.

Trump and Republicans can’t do much more damage to growth. Their policies are failing at almost everything they attempt. Trump’s signature tariffs are illegal and require refunding, which will aid the bottom line of corporations and lower the prices of such as Target and Walmart.

He has failed to win the Iran war, and the world is finding ways to work around the consequent energy shortages. And renewable energy sources are making a comeback.

The Japanese have even agreed to build small nuclear reactors and two huge natural gas energy projects in the Midwest and South.

Consumers haven’t stopped spending, either. Surprisingly, American retail shoppers are out in force again with the 1.2 percent August sales increase. Many consumers seem to be recovering from the shock to energy prices since the beginning of the Iran War.

And maybe payroll hiring will continue to improve with the 166,000 additional hires in August. But the bottom line is the Iran war must end as well, and everyone knows it.

Harlan Green © 2026

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

 

Will It Be a 'Hard Landing'?

Popular Economics

“The US LEI receded slightly in August, the first monthly decline since March of this year,” said Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board. “Four out of ten components fell compared to the previous month, with consumer expectations remaining a significant strain on the Index.”

 

LEI

Does the new Fed chairman want to be another Paul Volcker, whose Board of Governors raised the Fed Funds rate to 20 percent to cure the stagflation surge of the 1970s? We don’t need another ‘hard landing’, the economic term for an engineered recession.

New Fed Chair Kevin Warsh said at the most recent FOMC meeting that the Fed would do what it takes to restore confidence in the Federal Reserve to fulfill its mandate of low inflation with maximum employment.

And to make its point the 12 Fed Governors voted unanimously to raise their Fed Funds rate +0.25 percent, thus raising the Prime Rate from 6.75 to 7.00 percent that governs most installment loan and credit card rates.

So the surge in August retail sales might not be a good thing, as much as consumers would like to celebrate another good holiday, since how is the Fed to bring down inflation otherwise when consumers are a major cause of it?

The core personal consumption expenditure index—the version of the Fed’s preferred inflation measure for consumers that excludes food and energy prices—has exceeded the Fed’s 2% target for over 60 months.

The Conference Board’s Index of Economic Indicators (LEI) that attempts to predict future growth has been flashing signals of a slowdown for months per its graph above (downward slope of blue line).

But even the tariffs and Mideast wars haven’t slowed down consumer spending enough. The Fed is saying that it has waited too long to act to bring down inflation, which is endangering economic growth and the U.S. currency.

Chairman Warsh also said five years was too long to wait for the inflation rate to return its 2 percent target rate because of the tariffs and Middle East unrest. It was last this low during the COVID-19 pandemic.

Of course, “The odds of a serious Fed policy mistake are uncomfortably high and rising,” warned Mark Zandi, chief economist at Moody’s Analytics, in a post on X, I quoted last week.

Barron’s Randall Forsythe cites David Rosenberg of Rosenberg Research on what can be the most dangerous mistake, “Unless oil prices come down quickly. The only way by which interest rates bring inflation back to the 2% target is “by destroying enough demand to offset the supply loss. That is a recession by design,” he concludes.

Economists call it a ‘hard landing’. And that has always been the dilemma; how can the Fed boost interest rates just enough to engineer a ‘soft landing’, which means bring inflation back down to its long-term average without causing a recession?

This is the rock and a hard place I’ve been talking about. It can’t be done without real pain.

Harlan Green © 2026

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

What's the Fed To Do?

 Popular Economics

“Real gross domestic product (GDP) increased at an annual rate of 1.5 percent in the second quarter of 2026 (April, May, and June), according to the second estimate released today by the U.S. Bureau of Economic Analysis (BEA). In the first quarter, real GDP increased 2.1 percent.” BEA.gov

FREDgdp

Economic growth has slowed because of too much economic and geopolitical uncertainty that shows no signs of relenting. So, there are growing warnings that the Federal Reserve might be raising interest rates too soon in September.

“The odds of a serious Fed policy mistake are uncomfortably high and rising,” warned Mark Zandi, chief economist at Moody’s Analytics, in a post on X.

What mistakes? Like raising interest rates too soon to anticipate events that might not even happen. Dr. Zandi is commenting about a fear that the Fed will act too soon to curb the growing inflation surge, thus slowing economic growth unnecessarily in the face of more events that may require easier credit conditions.

I’m also on the side of caution. The record highs in financial markets fit all the signs of past investment bubbles. Therefore, raising interest rates prematurely may burst the investment bubble as it did the housing bubble that created the Great Recession.

The argument to hold rates or even lower them is because Trump’s tariffs have already reduced consumers’ pocketbooks. The $billions in refunds ordered by the courts from the illegal tariffs have mostly benefited major retailers such as Target.

Or, the Fed may be right to raise their rates now because inflation won’t slow down and the financial markets are at record levels, which will goose economic growth for probably the rest of this year.

That’s why inflation indexes like the wholesale PPI inflation gauge are trending above 5 percent while countries are already experiencing energy shortages amid two ongoing wars.

Economic growth is picking up from the A.I. buildout as well, which means inflation won’t come down of its own accord. There are predictions that third quarter GDP growth may be as high as 4 percent due to record corporate profits and the A.I. buildout frenzy.

The often cited Atlanta Fed’s GDPNow third quarter growth prediction has been above 4 percent since it was initiated in mid-summer, mostly due to predictions that robust consumer spending and domestic investments will continue.

“Real final sales to private domestic purchasers, the sum of consumer spending and gross private fixed investment, increased 4.2 percent in the second quarter, revised up 0.3 percentage point from the previous estimate,” said the Atlanta Fed.

Another inflation gauge, the price index for gross domestic purchases per the BEA announcement increased 5.8 percent in the second quarter, revised up 0.1 percentage point from the previous estimate. The personal consumption expenditures (PCE) price index increased 5.3 percent, revised up 0.2 percentage point, and the PCE price index excluding food and energy increased 3.6 percent, also revised up 0.2 percentage point.

These are more inflation measures that say inflation will require years to come back down to the Fed’s 2 percent inflation target. There aren’t yet ceasefires being negotiated in both wars, much less endings, and Trump keeps attempting to raise his illegal tariffs!

So the Fed is between the classic rock and a hard place. Raising rates will slow growth from the A.I. data center buildout while maintaining or lowering rates will keep consumers spending and the job market from collapsing.

But the Fed’s inflation mandate is in direct conflict with Trump administration policies that want to keep interest rates as low as possible to pay for its tax cuts and policy mistakes.

So why not be extremely cautious and protect yourself from all the possible disasters looming on the horizon? Or leave it to the Federal Reserve Governors to be the canaries in the coal mine.

Harlan Green © 2026

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

Inflation Out of Control?

 

Jobs Picture Improving?

 Financial FAQs 

“Total nonfarm payroll employment increased by 162,000 in August, and the unemployment rate was unchanged at 4.1 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in food services and drinking places and in local government education. The information industry lost jobs.” BLS.gov

FREDpayrolls

Total nonfarm payroll employment rose by 162,000 in August, higher than the average monthly gain of 31,000 over the prior 12 months, said the Bureau of Labor Services.The new payroll jobs tallied in August look to be a temporary blip after miniscule job gains the prior three months.

Why the sudden rise? These are largely service sector jobs, which means summertime travel and leisure activities pick up, and schools will soon begin.

Employment in food services and drinking places increased by 59,000 in August, well above the average monthly gain of 12,000 over the prior 12 months. Local government education added 42,000 jobs in August, offsetting a decrease in the prior month.

Will this reverse the severe job decline since early 2024, the start of the second Trump administration, that is portrayed in the Federal Reserve Bank of St. Louis (FRED) graph above?

Only if Trump will cease finding ways to illegally raise tariffs, begin to honor existing tariff agreements, and settle the Iran war that he is mired in. Oh yes, also stop the immigration policies that have depleted the number of working adults.

Otherwise, the one million fewer working adults who have stopped looking for work, thus shrinking the labor force, will also shrink economic growth.

The FRED graph is an accurate depiction of what a gutted labor market looks like since 2024. There is no consistency, because it reflects the moment-to-moment thoughts, or lack of thoughts, of a President who rules by distraction to shield the damage to economic growth he and Republicans are causing.

It’s a huge damage list—+300,000 federal jobs cuts by DOGE, downsizing or eliminating whole departments in Health and Human Services, the EPA, Medicare and Medicaid that hurts worker productivity by creating a sicker working population.

The bond rout (NYTimes) that is raising longer term interest rates has scared our allies. Both the Dutch and French governments have elected to remove their $billions in gold assets out of U.S. territory, where they have been traditionally held because they no longer trust the U.S. to keep international agreements.

Will other countries begin to sell off their U.S. holding of Treasury bonds as well? That would be a major red flag, as it means other countries are turning away from using the U.S. Dollar that supports most world trade.

Nobel Laureate Paul Krugman doesn’t think it’s a danger just yet.

“I’m not saying that Democrats should be like Trump, and blithely ignore debt and deficits. They should by all means push for tax hikes on high incomes, close loopholes exploited by multinational corporations, strengthen IRS enforcement, and more.”

The economic uncertainty could also be a result of Trump’s own deteriorating mental state and three more years of endless military wars. We will need our allies.

Harlan Green © 2026

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

Not A Merry Christmas?

 Financial FAQs

“Personal income increased $115.1 billion (0.4 percent at a monthly rate) in July, according to estimates released today by the U.S. Bureau of Economic Analysis (BEA). Disposable personal income (DPI)—personal income less personal current taxes—increased $125.9 billion (0.5 percent), and personal consumption expenditures (PCE) increased $36.3 billion (0.2 percent).” BEA.gov

 

BEA.gov

We are fast approaching the shopping season and there are growing worries about consumers ability to soldier on the rest of year with the sudden drop (-0.6%)in July retail sales. They seem to be running out of money. And we know what that means, since consumer spending powers most economic activity

The picture of declining consumer incomes in the BEA’s Personal Consumption Expenditures graph is disheartening, to say the least, and could precipitate a recession sooner rather than later. It’s not only because the job market is shrinking, but our working population as well.

The U.S. economy lost -23,000 payroll jobs this July after gaining just +20,000 jobs in July. It’s the picture of a labor market stuck in neutral; most employers are neither hiring nor firing.

Yet the unemployment rate has been stuck at a fairly low 4.2 percent for months. Why wouldn’t employers hire more workers? Because there’s not as much demand for consumer products, which powers most economic growth. And demand is declining, not only because of the soaring inflation—3.7 percent in the PCE report above—but fewer shoppers.

Population growth in the United States has slowed significantly with an increase of only 1.8 million, or 0.5%, between July 1, 2024, and July 1, 2025, according to the new Vintage 2025 population estimates released today by the U.S. CensusBureau.

And we know why.

“The slowdown in U.S. population growth is largely due to a historic decline in net international migration, which dropped from 2.7 million to 1.3 million in the period from July 2024 through June 2025,” said Christine Hartley, assistant division chief for Estimates and Projections at the Census Bureau.

Low population growth = slow economic growth = fewer jobs, in other words. The decline in “net international migration” is the culprit, to no one’s surprise. Trump is bragging about the tens of thousands of deportations in his single-minded assault on undocumented immigrants; many who have worked long enough in the U.S. to raise children who are citizens now serving in the military.

Those believing that inflation will decline as more companies adopt A.I. software to replace those workers and improve labor productivity will be sadly disappointed. The bond market selloff is the first warning that higher interest rates are here to stay—as long as higher tariffs and ongoing wars raise the risk factors that govern economic activity.

“Government bond yields are hitting multi-decade highs, reflecting anxiety about debt levels, deficits and inflation. The effects will extend to mortgages, business loans and other types of credit,” said the NYTimes at this writing.

Who will buy the products if there are fewer shoppers? That is Silicon Valley’s A.I. miscalculation. Consumers already know this, and their declining personal savings rate to 3 percent (in graph) highlights this fact. They have less to spend, period.

Harlan Green © 2026

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

Not Another Greenspan?

 Popular Economics

“The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.1 percent on a seasonally adjusted basis in July after falling 0.4 percent in June, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 3.4 percent before seasonal adjustment.” BLS.gov

FREDcpi

Kevin Warsh, the new Federal Reserve Chairman sounded hawkish in his first speech at the Fed’s annual Jackson Hole conference, as if an interest rate hike was needed soon to fight rising inflation.

"While the PCE and CPI (inflation) readings were better than expected, they do not tell me that underlying trends have meaningfully improved, and we must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do."

But Warsh is a true-red Republican appointed by President Trump and we know that Trump wants to keep interest rates as low as possible to pay for the tariffs and war he has started and will go at any lengths to make it happen, including attempting to fire Fed Governors (Lisa Cook).

Good luck is all I can say. Warsh confronts a scenario that is frighteningly similar to that of Alan Greenspan’s tenure as Fed Chairman in early 2000. President GW Bush needed ultra-low interest rates to pay for his wars on terror after 9/11. But he also passed huge tax cuts that Republicans didn’t want to pay for.

And Greenspan worked to assist him in financing the invasions of Iraq and Afghanistan by convincing his Fed Governors to hold down interest rates for as long as possible—too long it turned out. The Fed Funds rate was held at 1 percent while CPI inflation was ultimately rising to 5.3 percent by 2008, igniting the housing bubble that ultimately burst, thus creating the Great Recession.

Maybe Greenspan was at heart an inflation dove, because the Fed got behind the inflation curve and didn’t raise its Fed Funds rate to 5.25 percent until 2006, which was too late to stop the housing bubble and soaring inflation.

So does Chairman Warsh’s pronouncement that inflation will be tackled, no matter the consequences, to be believed? The Fed Governors have been sounding equally hawkish on the need to fight inflation. And "short-term interest rates are predominant tool to achieve the dual mandate," said Warsh (i.e., stable prices and maximum employment).

Yet U.S. debt is growing faster than the economy, and the job market is barely growing. A.I. won’t be the savior if consumers run out of money because they no longer have a job. The BLS’s latest benchmark revision of payroll jobs estimate implied that non-seasonally adjusted nonfarm payroll gains averaged about 11,000 per month through March over the preceding 12 months instead of 18,000, reports Reuters.

So will Warsh and the Fed be able to withstand the merciless vituperation sure to come from the child-like brain of Donald Trump and maintain the inflation fight when the going gets tough?

We don’t want another bubble to burst with A.I.’s investment bubble growing every larger on top of the tariffs and endless wars.

Harlan Green © 2026

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

Poor Retail Sales

Popular Economics

“Advance estimates of U.S. retail and food services sales for July 2026, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $763.6 billion, down 0.6 percent (±0.4 percent) from the previous month, but up 5.0 percent (±0.5 percent) from July 2025.” Census.gov

FREDretailsales

The alarming FRED retail sales graph above showed sales had plunged in August after a spending surge earlier in the year. Consumers had already spent the tax perks from Trump’s Big Beautiful Tax Bill. 

The U.S. economy is shrinking. Does this signal a breaking point, are consumers shopping less to preserve some of their declining savings? It is already happening, shown in part by consumer sentiment surveys.

The University of Michigan survey showed a sharp decline in their finances.

“Consumer sentiment fell about 8% this August, ending two consecutive months of improvement,” said Survey Director Joanne Hsu. “While views of personal finances saw only minor declines, expected business conditions sank 11% for the short run and 17% for the long run. Decreases in sentiment were seen across the political spectrum, with Republicans exhibiting the strongest month-to-month decline in August.”

If so, it’s a major danger signal that consumers, who account for two-thirds of economic activity, can no longer support as much economic growth. That leaves investment activity from the record corporate profits the sole leg propping up the financial markets’ record levels.

The retail sales decline is also another sign the U.S. population is no longer growing, and the immigration deportations will only make it worse because immigrants, legal or illegal, are shoppers.

The U.S. Census Bureau reports our population grew at a much slower rate between July 2024 and July 2025 than from 2023 to 2024 (when it increased by 1.0%, or 3.2 million people). “The slowdown is largely due to lower levels of net international migration.”

Consumers’ incomes are not keeping up with inflation as well. Wages rose 3.2 percent per annum whereas retail inflation rose 3.5 percent in the latest month. So, shoppers must now borrow more to keep up their standard of living, which takes a bigger slice of their incomes.

So the job market is shrinking, to no one’s surprise. But July’s catastrophic unemployment report tells us the loss of -23,000 payroll jobs was particularly alarming. Will the $trillions in AI investment replace those jobs and keep inflation from rising more?

I doubt it, since most of the inflation is due to the Trump administration’s tariffs and two wars still raging. It’s the stagflation scenario of the 1970s all other again—energy shortages + higher inflation = stagnant economic growth for years to come.

Harlan Green © 2026

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

 

Inflation is Here to Stay

Financial FAQs

“The Producer Price Index for final demand was unchanged in July, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. On an unadjusted basis, the index for final demand increased 4.7 percent for the 12 months ended in July”. BLS

FREDppi

The wholesale PPI is a sign that inflation is too high to raise hopes for any decrease in interest rates anytime soon. And because the PPI measures the cost of raw materials that go into retail products, it foretells how consumer prices will behave in the coming months.

In fact, August PPI also tells us why interest rates are soaring in the bond markets as well that set mortgage rates. It’s why 30-year fixed mortgage rates have risen to 6.67 percent at this writing.

So why are interest rates so high at this time? It’s not only the ongoing wars creating shortages in everything (mainly Iran and Ukraine) but the huge demand for money to build out the AI data centers. Elom Musk’s SpaceX IPO got ahead of the crowd by netting $75 billion, which delayed IPOs for Open A and Anthropic among others.

The IEEE Technology Society predicts that the AI build out will cost $363 to $400 billion. And the investments are mostly borrowed money which is driving up bond yields even higher, crowding out funding for much-needed government programs.

The 10-year Treasury yield is 4.70 percent today, up from its low of 4.1 percent April 3, 2025 (tariff liberation again).

And that’s not all. Once up and running, the amount of water and electrical power needed to operate the data centers drives up electricity prices as well. And global warming will be exacerbated from the excess amounts of heat generated.

Lawrence Berkeley National Laboratory projects U.S. data center electricity demand will grow from 176 TWh in 2023 (about 4.4% of total U.S. electricity) to 325–580 TWh by 2028 (6.7–12% of total U.S. electricity)

Tech financial analysts worry that enthusiasm for AI has turned into a bubble that is reminiscent of the mania around the  Internet’s infrastructure build-out boom from 1998-2000, I have also been saying.  During that time period, telecom network providers spent over $100 billion blanketing the country with fiber optic cables based on the belief that the Internet’s growth would be so explosive that such massive investments were justified.  The “talk of the town” during those years was the “All Optical Network,” with ultra-long haul optical transceiver, photonic switches and optical add/drop multiplexers.  27 years later, it still has not been realized anywhere in the world.

The annual PPI held at 4.7 percent for the past two months, down from 5.5 percent, which is the stratosphere as far as inflation is concerned. The last time it even approached the Fed’s 2 percent target was April 2025, the month Trump began his illegal liberation day tariffs that is now refunding, per the courts.

That’s probably why Q1 2026 GDP growth was just 2.1 percent, and the advance Q2 estimate was 1.5 percent, as I’ve said.

The real lesson(s) from the self-induced geopolitical uncertainty by the Trump administration is that many safeguards are being reduced or eliminated that protect the American economy and American citizens.   

These safeguards include paying down the national debt instead of tax cuts that increase it, funding scientific research instead of reducing it, and expanding public health care. 

Without those safeguards it's just a matter of time before another recession.

Harlan Green © 2026

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

Defeating The Greater Lawlessness

 Popular Economics Weekly

“The Republicans’ hunger for power has now reached such a point that they have selected and continue to support a president who has lied and cheated his whole adult life; from Trump Casinos to Trump Towers, from stiffing bankers and his workers to cooking the books.” H Green/Huffington Post

NYTimes

We knew as long ago as Nixon’s Watergate that the Republican Party harbored a lawless tendency when it suited them. Why else would President Reagan engineer the illicit Iran contra arms deal with Khomeini, or President GW Bush invade Iraq when UN inspectors already knew Saddam Hussein had destroyed his weapons of mass destruction a decade earlier, I said in 2017?

Now we have illegal tariffs and an unpopular war with Iran, one that will drive inflation even higher and might take years to return to the Federal Reserve’s 2 percent target to fulfill its mandate of full employment with stable prices.

The result? Another recession, sooner or later, as happened during Presidents Reagan (2) and GW Bush terms. In Bush’s case, he managed to turn four years of Clinton budget surpluses (1996-2000) that could have kept social security and Medicare solvent for decades into a worldwide Great Recession (2008-09), the worst since the Great Depression, according to most economists.

President Trump’s Republicans are following the same path with his huge tax cuts while borrowing $trillions to fight his wars, cutting public services to the bone and closing whole departments by firing more than 300,000 federal employees.

Republicans have doubled down on their lawlessness by allowing his illegal wars and tariffs, and maybe what could precipitate the next recession; their determination to deport as many undocumented immigrants as possible without allowing them due process or a legal pathway to citizenship.

Immigrants are taxpayers that add workers to our shrinking population, and their loss is depriving our economy of essential services—agricultural workers that supply our groceries, for starters, but also a large part of construction, healthcare, transportation and lower paying service workers in leisure and hospitality.

This can only be done because Trump’s Republicans either ignore or disregard the civil laws, as well as economic laws, and even the constitution in their hunger for power. This is impoverishing more Americans, not to speak of turning a blind eye to the illegal enrichment of the Trump family and their supporters.

What can be done to return the $trillions in wealth and power that Republicans have taken away from the American people via their massive tax cuts to corporations and wars that were never paid and ignore the most basic rules of capitalist enterprise, such as debts must be paid, contracts and treaties honored?

The sad fact is that the Iran war wasn’t necessary because President Obama had already negotiated a nuclear arms agreement with Iran and Trump’s tariffs have been mostly based on ignorance of foreign trade tradeoffs, not unfair trade practices.

The history of greater lawlessness and hunger for more power is leading to a massive disruption in foreign trade which is the life blood of the world’s economies. It is repeating the mistakes that choked off world trade in 1930 and led to the Great Depression.

The question is how much longer will consumers and voters tolerate the record of Republicans’ failures that have led to four recessions just since 1980 that were the result of their hunger for more power?

Polls are showing that ordinary Americans are beginning to understand what it means.

Harlan Green © 2026

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

“The economy hasn’t lost its mojo.” MarketWatch

 Financial FAQs

“Advance estimates of U.S. retail and food services sales for June 2026, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $768.6 billion, up 0.2 percent (±0.4 percent)* from the previous month, and up 6.7 percent (±0.5 percent) from June 2025.” Census.gov

FREDretailsales

Headlines, such as that consumers “haven’t lost their mojo” have popped up when retail sales rose 0.2 percent in June. It’s a sign of consumers are willing to ‘shop until they drop’, which may keep the U.S. economy growing for some time.

It also means that same level of irrational exuberance of the 1990s is back once again, with the major market indexes at record levels, and consumers seemingly oblivious to the conditions that prevailed during the late 1990s.

 Nobel Laureate Robert Shiller first presented the term irrational exuberance to Alan Greenspan’s Federal Reserve Governors in 1996 to evidence how overvalued stock market levels had become at the time. But it wasn’t until 2000 that the dot-com asset bubble burst that many market commentators and some economists are comparing to the current record market rally.

The MarketWatch headline portrays most of the media’s reaction to the latest Advance Retail and Food sales report by the U.S. Census Bureau. The slightly hysterical headline is really a sign of relief because of the slight drop in monthly gas prices that prevailed during the 60-day cease fire agreement.

But the cease fire has ended. And it reveals how badly the Trump tariffs and Iran war have hurt consumer spending, still the backbone of U.S. economic growth. We have been a consumer-driven economy since the 1950s and end of World War II.

And since retail sales are not inflation adjusted, when adjusted for inflation, gas and food in particular have become less affordable. Retail inflation is still above 3 percent. Retail sales have fluctuated wildly, as per the above graph, rising 6.7 percent in 12 months because consumer bought more in earlier months to get ahead of the rising inflation—i.e., before the Iran War began to jack up everyday prices.

Though sales at car dealers and online merchants both jumped about 2 percent in June, sales fell at grocery, clothing and healthcare stores, says MarketWatch.

So, consumers are still shopping because they must, putting them further in debt. The Consumer Price Index for basic necessities like gas and food is still above 3 percent, as I said, and the wholesale (PPI) price index for raw materials that go into retail goods is 5.5 percent annually, the U.S. Bureau of Labor Statistics reported. It’s still the largest rise in more than three years.

We don’t have to look at just the dot-com bubble to compare, either. I see an unsettling resemblance to the ‘roaring twenties’ of an earlier era from the recovery of another pandemic, the Spanish Flu pandemic of 1919 to 1920 that killed what would be millions of Americans if at our current population level.

It was a long recovery—until 1929 and the Black Friday stock market crash that led to the Great Depression, caused in part by another era of high tariffs that led to product shortages.

How long may this era of irrational exuberance last that has driven the financial markets to record levels with so much wealth pouring into a new space age that will take us years to return to the moon, much less turn a profit?

We are at another turning point in what currently looks like an A.I. revolution, much like the Internet’s introduction that took decades to adopt, and recovered from a Great Recession, let’s not forget.

So the best way to survive another bout of irrational exuberance is to be patient, in my opinion, rather than listen to the crowd that promises the next big thing.

Harlan Green © 2026

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

No More Jobs?

 Popular Economics Weekly

“Consumer confidence inched up in June as falling oil prices in recent weeks provided some relief to consumer inflation fears,” said Dana M Peterson, Chief Economist, The Conference Board. “Consumer appraisals of current business conditions were slightly more positive compared to last month. However, perceptions of the current labor market softened measurably as the percentage of consumers saying jobs were ‘hard to get’ rose to 22.5%, the highest level since January 2021 (22.8%). Conference Board

 

MarketWatch

The Conference Board’s Consumer Confidence Survey highlighted what was behind the meager total of 57,000 new jobs in June – the fewest in four months. The job market may not recover from the damage the Trump administration has done to the U.S. economy anytime soon.

Some 755,000 worker dropped out of the labor force in June because “jobs are hard to get,” said the Conference Board’s survey.

What's more, job gains in May and April were revised down to a combined 277,000 from a previous 351,000 - 74,000 fewer than previously reported.

Trump’s Iran War disaster is probably the main reason for the job losses because higher energy prices from the Middle East are elevating inflation and slowing down hiring for years to come. Wall Street is hoping the A.I. revolution will boost labor productivity to such an extent that it will tame inflation, but without creating many new jobs.

The other culprit for fewer new jobs? Federal immigration officials have detained more than 10,000 people in the last five days, reports the NYTimes, a major surge that has stemmed from a push within Immigration and Customs Enforcement to increase arrest rates. Immigrants won in the latest SCOTUS rulings that ICE cannot hold them without due process, which might slow down the roundups because it means a bond hearing.

The shrinking labor force will shrink economic growth as well since fewer workers means less will be produced; unless the A.I. delivers on it promises of higher producivity. And that will take years. But that means fewer workers, anyway. There will be more robots, Claude, ChatGPT, Open AI, etc., etc. and a shrinking workforce that pays less taxes to support public policies, social security, Medicare and public debt don’t forget, which is soaring, of course.

Well, many of the new jobs will be in the lower paying healthcare industry — hospitals, doctor's offices, dentists, nursing homes and so forth — that created 47,000 of the 57,000 new U.S. jobs in June.

The big question will be how to support our public policies that serve all Americans in the future (and preserve jobs), rather than more Republican policies that continue to favor the concentration of wealth via A.I. or whatever, driving U.S. ever closer to insolvency.

Harlan Green © 2026

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

No Relief From Inflation

 Popular Economics Weekly

 “From the same month one year ago, the PCE price index for May increased 4.1 percent. Excluding food and energy, the PCE price index increased 3.4 percent from one year ago.”

 

BEA.gov

The Personal Consumption Expenditure Index (PCE), the Federal Reserve’s preferred inflation gauge that covers the widest spectrum of price changes, showed no relief in May. In fact, the PCE graph above showed inflation’s steady climb since Trump’s April 2025 Liberation Day (illegal) tariff hikes levied on the rest of the world that must now be repaid.

Refunding the tariffs to importers won’t reduce inflation because the higher import costs were passed on to consumers and producers. It becomes a chain reaction as those costs work through the economy. There are also the distributors, for instance, as well as the retailers and manufacturers’ profits that go into the chain.

The 4.1% annual inflation rate means inflation is now out of control for wholesale prices that go into the finished products as well. This is while Kevin Warsh, the new Fed Chairman, has said he is committed to bringing inflation back down to 2%.

When and how can it be done? We will be living with the likelihood the Fed may have to raise interest rates sometime this year. The Ukraine and Iran wars are creating more product shortages on top of the supply chain shortages caused by the tariffs.

The Ukraine war could be over if Trump had taken Ukraine’s side in the conflict instead of Putin’s. And how will he handle the Iranians who have the U.S. over a barrel (of more than oil) because he must bring down the price of oil-based products as well?

The U.S. economy is growing at 2% in the latest first quarter revision because consumers have kept shopping, but with a terrific toll on their personal savings rate (down to just 3%).

The financial markets have added to the frenzy because of the A.I. spending to expand data centers. There’s more than a little irrational exuberance prevailing, I said last week.

Their actions have raised consumer prices to such a level that they may not come down for years. We know this because the wholesale Producer Price Index (PPI), that measures the price of raw materials going into the finished products rose a whopping 1.1% in May, seasonally adjusted, also the largest rise in more than three years that must work its way through the product chain.

No, inflation is here to stay for a while, producing an immense asset bubble as the U.S. economy advances into the next stage of our industrial revolution. Economists have another term to describe it—creative destruction—that economist John Kenneth Galbraith said was,

“the cyclical process by which the system eliminates the people and institutions which are mentally too vulnerable for useful economic service. Unfortunately the process has larger and less benign effects, including the possibility of painful recession or depression.”

We are in this inflationary mess because of executive actions made on impulse rather than research by a President and advisors who are completely ignorant of  basic economic theory, who has said he likes the inflation and no longer cares about the economy.

Who will be the winners and losers in the A.I. economy to come at a speed that will upend the lives and jobs of the next generations?

Harlan Green © 2026

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

Retail Sales Recovering?

 Popular Economics Weekly

“Advance estimates of U.S. retail and food services sales for May 2026, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $763.7 billion, up 0.9 percent (±0.4 percent) from the previous month, and up 6.9 percent (±0.5 percent) from May 2025.” Census Bureau

 

FREDretailsales

Retail sales are recovering in 2026 because consumers are still shopping, even though paying more for automobiles and gas because of the higher inflation. But it’s emptying their pocketbooks, to no one’s surprise.

So why do they keep shopping? There’s more than a little irrational exuberance prevailing at the moment in financial markets because of optimism over the SpaceX IPO that is breaking sales records. It’s called herd behavior in economic parlance, because its investors seem to believe SpaceX is the next big thing without too much forethought.

Nobel Laureate Robert Shiller calls it lazy thinking, listening to little more than word of mouth or hearsay, or scanning the headlines but not what is between the lines, instead of researching it.

SpaceX is making a tiny profit, yet Elon Musk’s hyper sales pitch has investors believe the sky’s the limit with future earnings from…what, a trip to the moon or Mars? Its IPO has capitalized it as high as established corporations such as Microsoft that have a track record of real profits.

The stock market indexes are still breaking records in part because the major corporations have record profits. And the job market is finally recovering, after almost no job growth last year. The sudden hiring surge is because manufacturing has rebounded; both from the Biden administration’s $5 trillion raised in legislation to modernize U.S. infrastructure and the $1.5-2 trillion suddenly pouring into the A.I. construction of data centers.

In fact, there’s so much irrational exuberance that this so-called A.I. revolution is now being compared to the Dotcom (in 2000) and housing bubbles (2008).

Too much fiber optic cable was laid in the years leading up to 2000 that is only now turning a profit, and too many homes were built during the bubble that weren’t being absorbed by the housing market, resulting in basically flat home sales and too little construction of new homes for a decade.

This is even though the U.S. population has increased by 60 million since 2000, according to the Census Bureau. The result is the lack of affordable housing and record homelessness, a cure of which would be more profitably invested in, rather than A.I.

But despite the market optimism, most consumers have become more cautious. Irrational exuberance hasn’t convinced ordinary consumers who can barely afford to keep up with rising prices. The Conference Board’s Index of Leading Economic Indicators that attempts to predict business cycles, shows too many headwinds for much improvement.

“Consumers are feeling squeezed because everyday costs—especially gas and energy—are rising faster than their incomes, leaving many households with less money available for things like travel, restaurants, entertainment, and shopping. The good news is that businesses are spending heavily on AI, data centers, and new technology, helping to keep the economy growing, while consumers pull back spending,” said Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators for the Conference Board.

Growing retail sales are a positive sign that the economy is improving for consumers as well as market investors but it can’t last unless inflation declines. Will artificial intelligence be the ticket to greater prosperity for all?

Let’s hope so, otherwise the A.I. bubble will also burst.

Harlan Green © 2026

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

"I Love the Inflation."

 Financial FAQs

Huffington Post

Why would our President say, “I love the inflation.” in the Oval Office in front of the world’s press? Huffington Post reported it was after being asked if Trump was concerned about new consumer price index data that showed the annual inflation rate at a 4.2%, three-year high.

Energy prices are skyrocketing with no prospects for a resolution to the Strait of Hormuz closure. And the latest inflation news is that the Producer Price Index for final demand just rose a whopping 1.1% in May, seasonally adjusted, the U.S. Bureau of Labor Statistics reported, also the largest rise in more than three years

And the PPI contains the prices of the raw materials (such as oil products) that go into the Consumer Price Index. So no relief in sight for the pocketbooks of most Americans, the 80 percent of wage-earners that statistics show are now living from paycheck-to-paycheck.

Huffington Post reports the anti-Trump group Home of the Brave said that was why it was already putting the president's remarkable quote on political billboards in 16 states, part of a $15 million advertising buy highlighting the rising cost of living.

Yet there is a booming stock market (Thank you, Elon Musk’s SpaceX IPO). This is while wages rose 3.4 percent in the latest May unemployment report, which means it can’t keep up with 4.2% Inflation.

Most Americans are depleting their savings just to survive. The latest Personal Consumption Expenditure survey shows the sharp drop in personal savings—from 6.4 percent of their disposable income in January 2024 to 2.6 percent today that consumers are drawing from to keep up their spending.

It’s because most of the job growth has been in the lower-wage service sector—such as healthcare, education, and social services. Wages began to drop below 4 percent in May 2024, at the same time as inflation began to rise when Trump announced higher tariffs on all 180 countries in the world, which his advisors had to know meant another tax on consumers.

So the real reason Trump made such a flippant remark must be because he doesn’t give a damn about inflation, is blatantly ignoring the promise he made to voters that he would bring it down from “day one” of his presidency.

Why? He needs taxpayers to help pay down the ballooning debt incurred from his Big Better Tax Bill giving his fellow oligarchs such large tax breaks that it is endangering the full faith and credit of our government.

There’s another ‘balloon’ we should also start worrying about, the $ billions being invested in upcoming IPO's such as Elon Musk’s Space X that has sucked up some $75 billion in investments with little profits to show from it, and two more high-profile IPOs to follow: Anthropic and Open AI.

It’s part of the A.I. boom that’s being touted as another Industrial Revolution. But we mustn’t forget the pain such revolutions cost. The Industrial Revolution dating from 1890 caused 15 deep recessions or depressions, such is the price of such progress.

Or, we can demand that the record number of billionaires being created, and now even Elon Musk, the first Trillionaire created from the SpaceX IPO, pay their fair share.

Harlan Green © 2026

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