The increase in the PPI means that consumer prices will be heading even higher in the future. For example, the price of diesel fuel, used in trucking, farm and warehouse equipment, was up 12.6% in just one month, adding to the cost of food and almost all goods that are shipped by trucks. The wholesale cost of transport by truck rose 8.1% in April as compared to March. Air freight costs also rose, but by a “smaller” amount of 3.6% for the month.

Major companies such as Whirlpool, a maker of appliances, announced a 10% price increase in April, and another 4% to be imposed in July.

Parts of the PPI report also feed into the Personal Consumption Expenditure, or PCE, price report that is coming out May 28. The PCE price index is the inflation measure followed by the Federal Reserve Bank, which traditionally raises interest rates when inflation rises.

With inflation rising, bond prices are falling, since inflation erodes the fixed interest payments that bonds pay. This means that the interest rate on bonds is going up; for example, the ten-year U.S. Treasury bond before the war on Iran was 4.02%, and it is now 4.46%. The ten-year U.S. Treasury bond is a benchmark that impacts other loan interest rates. For example, the 30-year fixed rate mortgage was just below 6% right before the war started, is now at 6.45%. Rising mortgage interest rates mean larger loan payments, reducing even more the affordability of buying a home.

#SanJoseCA #CA #CapitalismAndEconomy #Inflation

The rising costs of energy drove the increase in prices, on the backs of higher fuel prices as a result of Trump’s war on Iran. Gasoline prices were up 28.4% over a year ago. Electricity rates were up 6.1% from a year ago.

These higher prices mean that the purchasing power of workers’ incomes, or what economists call real income, fell in April as compared to March, and also fell compared to a year ago. Using another measure of prices paid by workers, the CPI-W, real wages or hourly earnings fell 0.3% in April from March, and fell 0.2% as compared to a year ago.

There were also signs that higher fuel and energy prices are spreading to goods and services that use a lot of energy to produce. With diesel fuel prices up over 60% from a year ago according to the AAA (American Automobile Association), transportation costs are showing up in the higher prices for food, up 0.5% in April as compared to no increase in March. Airline fares have soared, up more than 20% as compared to April 2025, as jet fuel prices have almost doubled.

While economists often refer to the “core” rate of inflation, which takes out food and energy costs as they are more variable month to month, this means that the actual rate of inflation for lower and middle income households is actually greater than the headline (total) inflation, since those consumers spend more of their income on necessities like food, gasoline and electricity.

With Trump polling at all-time lows, with 70% of people disapproving of him on the economy, Congress is proposing to suspend the federal gasoline tax. However, the tax is only 18 cents a gallon, or about 4% of the current national average price. But with gasoline up more than 40% since the war started, this would at most offset 10% of the increase. Further, the gasoline tax is an excise tax that the seller pays, so there is no way to ensure that the gasoline sellers pass on the tax cut to drivers.

With no end in sight to the war that is blocking the flow of oil, gas, fertilizer, sulfur (used in industry) and helium (used in a lot of tech industries), higher prices are likely to spread to more and more goods and services.

#SanJoseCA #CA #CapitalismAndEconomy #Inflation #Featured

The employment report, based on a survey of businesses, was strong relative to the weak hiring in 2025, with 115,000 new jobs created. There were still pockets of weakness, with government jobs declining by 8000, making April the seventh month in a row of job losses by government workers. Manufacturing also lost jobs, down by 2000 jobs.

However, the survey of households showed more weakness, with the labor force participation rate declining by 0.1%. Without this decline, the unemployment rate would have gone up. The unemployment rate was also held down by a big jump in self-employed workers, many of whom, like rideshare drivers, are really a new type of temp workers. Last, but not least, the broadest measure of unemployment, which includes people who gave up looking for work and people working part-time who can’t find full-time jobs, rose to the highest this year, at 8.2%.

Workers’ compensation, including wages, benefits and taxes paid by the employer, rose 3.1% in the first three months of the year (January to March) according to another BLS report issued Thursday, May 7. But prices rose even faster, meaning that real compensation, or the purchasing power of workers’ wages and benefits, actually fell by one half of one percent, or 0.5%, during these same three months.

This meant that the share of total output in the economy that goes to workers was only 54.1% in the first quarter, the lowest since these records began almost 80 years ago, in 1947. With more of the share of the economy going to corporate profits, rent, interest and small business income, it is no wonder that more and more people feel that the rich are getting richer, and the poor poorer.

The growing divide between haves and have-nots can also be seen in the contrast between the latest Consumer Sentiment report by the University of Michigan and the booming stock market. The Consumer Sentiment report, which covers the period of April 21 to May 4, fell to an all-time low of 48.2. This drop reflected consumers’ expectation of inflation to rise. Expectations are that inflation will jump over the next year from 3.3% over the last 12 months to 4.5% over the next 12 months. This will further reduce the purchasing power of workers’ wages.

In contrast, the stock market, as measured by the broad S&P 500 Index, is at an all-time high. The stock market is being driven by corporate profits and the fast-growing wealth of those at the top. In particular, semiconductor chip stocks have risen to about 15% of total stock market value, even higher than during the 2000 dot-com stock market bubble.

How have sales and business profits held up with so many working-class households struggling amid soaring gasoline prices? On one hand, more and more consumer spending is based on high-income households as the economic divide in terms of income and wealth continues to grow. On the other hand, lower and middle income households, mainly the working class, are borrowing more to make ends meet. The Federal Reserve report on consumer credit, released yesterday, May 7, shows that credit card borrowing increased at the fastest rate since the last bout of inflation, in 2022.

#SanJoseCA #CA #CapitalismAndEconomy #Jobs #Unemployment #Featured

Last July, the Trump administration increased work requirements for people who are getting food aid under the Supplemental Nutrition Assistance Program, or SNAP. Since then, almost 3.5 million people have been dropped from SNAP, or 8% of the total. But in some states, such as Arizona, the number of people getting food aid fell by almost half.

This is despite the official government estimate that almost 50 million people, or almost 14% of households, are “food insecure,” meaning that they have to cut back on how much they eat, or reduce the quality of their food. This is even more severe among households with children, where 18% are considered food insecure.

When the Republican Congress did not extend federal subsidies for private health insurance that were expanded during the COVID-19 pandemic, premiums soared. People in Republican-led states that did not expand Medicaid – older people, those with middle incomes – were hit the hardest. Initial sign-ups fell by more than a million people, but millions more are being dropped after not paying the higher premiums, which could increase tenfold or more.

Before the cuts, 8% of Americans, or 27 million people, did not have any health insurance at all. Almost 40% of Americans depend on government health insurance, mainly Medicare (for seniors and disabled) and Medicaid (for lower incomes). In addition, there are the Veterans Administration and the subsidized ACA marketplace, which are also government funded. While statistics for this year and the impact of the cuts won’t be available until the fall of 2027, the number of Americans without any health insurance is rising.

Finally, foreclosures on homeowners still paying their mortgages rose 26% over a year ago, to the highest level in six years. In the first three months of 2026, almost 120,000 foreclosures were filed by lenders against homeowners who fell behind on their payments. Partly this is because of the end of mortgage protections for borrowers passed during COVID-19, but homeowners with mortgages are also under pressure from higher home insurance premiums and property taxes.

#SanJoseCA #CA #CapitalismAndEconomy

While the United States produces more diesel fuel than it consumes, the difference is exported. With prices of diesel fuel much higher in many countries, this can pull up the prices of diesel fuel here in the United States.

The price of diesel has not had much of an impact on consumer prices, which rose almost 1% in March over February and 3.3% from a year earlier. But many businesses use diesel fuel for their trucks, farm equipment and construction equipment. Big corporations have begun to increase their prices to try to offset this. For example, the fuel surcharge for UPS rose to 27%, up from 21% before the war started.

But smaller businesses, like independent truckers, are often not able to do this. This means that their margins and income are cut, or they drive less, again cutting their revenue. Small farmers are also feeling the squeeze, not only with diesel prices, but prices of fertilizer are also up.

These higher costs will trickle up to consumers. While there was scant evidence of this in March, some price increases are likely in April and even more after that. While a big part of Trump’s election campaign in 2024 was him saying he was going to fight inflation, his tariff increases that began on so-called “Liberation Day” in April 2025, and then the war on Iran, have already pushed the Consumer Price Index to the highest rate since Trump took office.

#SanJoseCA #CA #CapitalismAndEconomy #Inflation #Iran

The rise in prices was led by gasoline, up 21.2% in March. While the prices for consumer goods and services other than food and energy, or the so-called “core inflation rate” only ticked up 0.2% in March, the rise in fuel prices started to spill over into other goods and services. Airline fares, where jet fuel is a major cost, rose 2.7% in the month of March, and 14.9% from a year earlier.

This increase in prices and the rate of inflation follows the U.S.-Israeli war on Iran, launched in the last days of February. In response to the massive U.S.-Israeli bombings, with well over 10,000 targets, Iran has retaliated against U.S. bases and businesses in the Persian Gulf and Israel itself. In addition, Iran has taken control of the Straits of Hormuz, through which flowed about 30% of the world’s exported oil, and large amounts of natural gas, urea (used to make fertilizer), and helium, used in chip manufacturing and other high-tech goods like MRI machines.

With a relative ceasefire, Trump administration negotiators led by Vice President Vance are meeting with Iranian representatives for talks hosted by Pakistan. The flow of oil, fuels and chemicals is still just a trickle, mainly ships holding Iranian oil, which now fetch almost twice as much as before the war started because of the rise in the price of oil and the fact that the Trump administration lifted sanctions on their oil. Even though oil futures have dropped back down below $100 a barrel, this is still 50% higher than their pre-war prices. The purchase price of actual, or physical oil, is another $30 a barrel higher. Even worse, with the last shiploads of oil that made it out of the Persian Gulf unloading their oil at their destinations, the soaring price of oil will soon become a physical shortage of oil in more countries.

Not surprisingly, this surge in prices weighed on consumers’ confidence. The University of Michigan’s Sentiment Index fell to a record low of 47.6. This is the lowest in the survey’s 74-year history, lower than the 2008 financial crisis and the oil-price shock of 1979 after the revolution in Iran that ended the reign of the U.S.-backed Shah of Iran and the beginning of today’s Islamic Republic.

With prices soaring, more and more Americans who were living paycheck to paycheck are falling behind. One of the businesses benefitting from hard times are pawn shops, which reported more business in March. There are now corporate chains of pawn shops, whose stocks are at multi-year highs, in effect profiting from economic problems.

#SanJoseCA #CA #CapitalismAndEconomy #Inflation

While stock prices rose when Trump announced he was postponing an escalation of the U.S.-Israeli bombing campaign earlier, when he did this again on Thursday, stock fell on Friday. This shows that Wall Street is seeing through his almost weekly proclamations that the U.S. and Israel had “won,” or that Iran is desperate to negotiate an end to the war, that the war would be over soon, etc.

The reality is that Iran has taken effective control of the Straits of Hormuz, only letting through ships with Iranian oil or with cargos destined for non-U.S. allies such as China. Iran has been preparing for this attack for more than three decades, ever since the U.S. egged on Iraq to invade Iran in the 1980s.

Trump is actually the one who needs to end the war, as he becomes more and more unpopular just as the November midterm elections are coming up, threatening a loss of the House of Representatives and possibly even the Senate from Republican control. Trump’s “Plan B” is to further escalate by putting “boots on the ground” as thousands of Marines and Army troops are on their way to the war zone. The administration is also asking for an additional $200 billion in military spending, which could only mean a longer and wider war.

The Trump administration has learned nothing from the trade war with China last year, where the U.S. ultimately had to back down as China matched tariff for tariff and then won with export controls on critical minerals. Nor did the administration learn from the U.S. defeat in Afghanistan. As one pundit said, “While the United States took 20 years to replace the Taliban with the Taliban in Afghanistan, Trump has managed to replace the Ayatollah Khamenei with Ayatollah Khamenei in 20 days!”

On Wall Street, the prices of bonds also fell, meaning that interest rates on the bonds went up. The interest rate on the benchmark ten-year treasury bond has gone up by almost half a percentage point, from 3.96% before the war started to going up by 0.4 to 0.6 percentage points, making buying a home even less affordable.

More and more financial analysts are coming around to the view that Wall Street investors are still underestimating the length and cost of the war, hoping that there will be a quick end. What Wall Street and the Trump administration don’t seem to understand is that while it only takes one side to start a war, it takes both sides to end a war. With Iran holding firm under the U.S.-Israeli bombs, and the weakness of the U.S. side showing when the Trump administration lifted sanctions on Iranian and Russian oil, it is not clear why Iran would want to end the war any time soon.

#SanJoseCA #CA #CapitalismAndEconomy

San José, CA – The price of regular gasoline has soared a dollar a gallon on average since Trump ordered this country to war with Iran. According to the American Automobile Association or AAA, the average price has gone from $2.96 a gallon a month ago to $3.98 gallon on March 24, or more than 34%.

How high could they go? No one really knows, but according to my “Trump secretly loves California” theory, since Trump has brought the national price of gas closer where the California price was before the war started ($4.63), it is quite possible that $5 a gallon gasoline could be seen in gas stations across the country in the near future.

But gasoline prices are just the visible “tip of the iceberg” for consumer price inflation. Diesel prices are up 43% since the start of the war, even more in percentage terms than gasoline, and are now more than $5.35 a gallon on average nationwide. While very few individuals have cars that run on diesel, most trucks and farm equipment use diesel fuel. The rise in diesel prices will further squeeze smaller farmers and truckers, while the increase in costs will be showing up in food prices and the prices of almost all goods which are shipped to markets.

The cost of urea, the basic building block for nitrogen fertilizers, is also up 45% since the war started. Part of this is because the in response to the U.S.-Israeli attack and bombing campaign, most the major exporters of urea are either directly affected by the war (Saudi Arabia and Oman), or indirectly, as they (Egypt, China, Malaysia and Indonesia) import the natural and petroleum gas used in urea production from the Mideast. This will squeeze farmers even more, and some of the costs will pass through to higher food prices.

Finally, Qatar is a major producer and exporter of helium, which is a by-product of natural gas production. Helium is used in the production of MRI machines, production of semiconductors, and other industrial uses. Helium prices up 70 to 100%, will likely lead to shortages, depending on how long the war lasts.

While Trump has been saying from the start of the war, more than three weeks ago, that the war is almost over, the fact of the matter is that more than 5000 U.S. troops, both Marines and Army, are on the way to the Middle East, signaling another escalation of the war, with U.S. boots on the ground.

#SanJoseCA #CA #CapitalismAndEconomy #Inflation #Gas #Featured

But AI is not on the verge of being introduced, it has been introduced into every sector of the economy possible, and the balance sheets are coming up wanting. Last year MIT conducted a study of over 300 firms and found that 95% of them saw no return whatsoever on their investment in AI. British firm PricewaterhouseCoopers reported in its 29th annual CEO survey that over half of respondents had seen no benefit from AI whatsoever, either in the form of reduced costs or higher revenue.

Despite these gloomy reports and increasing fears that the dramatic overvaluation of the tech companies tied into the AI boom is a financial bubble waiting to pop, the tech moguls are still demanding more investment. For the most part, they are getting that investment, whether into sprawling new data centers or the power stations to keep them online. While cultural backlash to AI “slop” is becoming more and more widespread, it is clear that the capitalist class still sees AI as the future.

In trying to understand why, it is important to disaggregate the hype of AI’s most shameless salesmen, like Sam Altman or Elon Musk, from the actual capabilities of the technology. Essentially at its core all of what we see called “AI” is just a series of mathematical equations whose parameters are set by a combination of pre-existing data and manual rules set by its designers. The process of “training” AI can be likened to feeding paper into a shredder that can then recombine the letters and words to form new sentences. The AI is “incentivized” to make “good” sentences, which tends to mean ones that look like a human could have written them. The same goes for photos, videos, or music: all the AI is doing is regurgitating something it was already fed.

Throughout the entirety of the process, then, human labor still plays the essential role. Humans need to make the works to be fed to the AI in the first place, because if AI is trained on AI generated data it begins to “rot” and produce increasingly poor results. Then humans need to design the mathematical procedures for the AI to be “trained,” and humans often have to intervene forcefully to prevent the AI from breaking the law (by relaying legally sensitive information like how to make explosives or creating images of illegal activity like CSAM). Then, to create the final generated product, the AI needs to be prompted to do so by a human, who needs to write the prompt in such a way that the machine gives them the output they want. The value that AI possesses is the value of embodied human labor within it.

This is plainly not what capitalists believe. They think that AI carries in it the same unique capacity that only human labor power possesses: the ability to create new value beyond that which it cost to produce it. Capitalists do not understand that, out of the portion of capital they advance for means of production, and out of the portion of capital they advance for labor power, it is only the latter that creates new value in excess of that initial advance. To them, it simply appears as a profit in excess of the total cost they paid. While AI’s mystification is particularly intense, the capitalist class has never understood this fact about any machine, or indeed about their entire mode of production: the origin of profit is in the unpaid labor time of workers.

It is no coincidence that AI investment and speculation took off in the last five years, in the wake of COVID’s disruptions and the growing power and militancy of the labor movement that emerged out of them. Capitalists are desperate for the next big technological innovation to save them from the contradictions of capitalism, as Mr. Andreessen himself admitted last month. “If we didn't have AI, we'd be in a panic right now about what's going to happen to the economy,” he said on a podcast, claiming that “declining population” (a racist dog whistle he uses alongside Elon Musk) and “slow productivity growth” would be the “real crisis” that AI is thankfully solving.

What he is facing up to is the idea that without populations of “surplus” human beings to form the reserve army of the unemployed, and with the rate of profit falling continuously as more and more capital becomes advanced and embodied in machines that merely transfer value and do not create it, that capitalists are dinosaurs living on borrowed time. As they look up at the meteor of class struggle and socialism plummeting towards them, they are conjuring phantasms and trying to breathe life into them with dollars and electricity. AI can be a useful tool, a means of production like any other, but it will not save capitalism from itself.

#WestLafayetteIN #IN #Commentary #Opinion #CapitalismAndEconomy #AI

This is about the same as the increase in the price of regular gasoline nationwide. According to the American Automobile Association, the price of gas had gone up 43 cents a gallon, or more than 14% since the war started on February 28.

I detoured past my daughter’s elementary school on my way home. It looked exactly the same, with a few children playing in the playground, about average for a non-school day. I was thinking of the girls’ school in Iran, which the United States had bombed on the first day of the war, killing some 175 people, mainly young girls, along with their teachers, school staff and likely a few parents. This was one of the United States so called “precision” missiles, which was guided to a civilian target, irrespective of the loss of life.

With the price of future contracts for delivery in April soaring above $100 a barrel on Sunday, March 8, up by almost 40% in the week since the war started, the price of gasoline and other petroleum products have even more room to rise. Diesel fuel is up about 14%, jet fuel is up over 50%, raising costs for trucking firms and airlines, with smaller businesses being hard hit. Larger corporations will use their market power to pass on the costs to consumers, while smaller firms are more likely to take losses, and if higher prices persist, even go out of business altogether.

According to the U.S. military, the war with Iran is costing about $1 billion per day. But Congressional Republicans have given an estimate that is twice as high, or $2 billion per day. Now nine days into the war, $10 to $20 billion dollars have already been spent, and the number grows with each passing day.

Another week and the costs of the war will be almost the same as the money the federal government saved by allowing the Affordable Care Act subsidy expansion to expire. At a time when food aid is being cut, health care is being cut, and more than 300,000 federal government staff have been cut, more and more of the claimed savings from those cuts are being spent on war.

#SanJoseCA #CA #CapitalismAndEconomy #Iran

The job losses were widespread, including manufacturing, construction, transportation and warehousing, information, temporary help, health care, leisure and hospitality, and government all shedding jobs.

In addition, the job creation numbers for December were revised down by 65,000, meaning that instead of gaining 48,000 jobs as previously reported, there was a loss of 17,000. The very good January figures were also revised down by 4000, to 126,000. Taken together, only 7000 jobs were added in December through January, or about 2300 a month.

The unemployment rate also ticked up to 4.4% from 4.3% in January. This is a rise of a whole percentage point from the recent low of 3.4% in April of 2023. In addition, the labor force participation rate dropped from 62.1% to 62%, which tends to lower the unemployment rate, as people with jobs who stop looking are counted as out of the labor force and not unemployed. The increase in joblessness was concentrated among oppressed nationalities as the unemployment rate for Asians, Blacks and Latinos all rose, while the unemployment rate for white Americans stayed the same.

In another sign of economic weakness, U.S. retail sales declined in January by 0.2%, followed by no gain in December. Retail sales figures are not adjusted for inflation, which means that when the changes in prices are taken into account, actual sales fell for the second month in a row (note: these sales figures are seasonally adjusted to take into account the annual bump in sales during the holidays). This decline was led by a 0.9% drop in auto sales, which, as a big-ticket item, often are the first to suffer an economic downturn.

While one month does not decide the direction of the economy (look at the large gain in jobs in January), if large job losses continue, this would be a sign the economy is entering a recession.

#SanJoseCA #CA #CapitalismAndEconomy #Employment

The court singled out Trump’s use of the International Economic Emergency Powers Act, or IEEPA, to levy tariffs on almost all countries and particular tariffs on Canada, China and Mexico – allegedly for facilitating the importation of fentanyl into the United States. The legal basis for the ruling was that the IEEPA makes no mention of tariffs.

This is the first major case where SCOTUS has limited the power of the presidency under Trump.

Trump was not happy about the decision, saying, “I can do anything I want” and re-imposed a global 10% tariff on imports using the Section 122 of the Trade Act of 1974, which allows the president to impose tariffs of up to 15% in response to a “large and serious” balance of payments deficits. The United States has been running large and serious trade deficits for decades, mainly because U.S., European and Japanese corporations have offshored production meant for the U.S. market, for example Apple’s computers and smartphones.

However, this law only allows for tariffs for a period of 150 days, meaning that Trump would have to ask Congress to agree to an extension in July. This is very unlikely to happen with the midterm elections looming.

Trump is also likely to expand sectoral, or good specific tariffs under section 232 of the Trade Expansion Act of 1962 where imports are a “threat to national security.” He has already used this to put tariffs on aluminum, steel, copper, lumber and wood products. This act is commonly misused because the threat to national security is not defined.

For example, imported kitchen cabinets are being tariffed because the wood products industry is claimed to be important to national security. However, this act requires an investigation and finding by the Commerce Department which takes time and effort and cannot be done on a whim.

In a sign that the chaotic tariff rollout and retractions are not over, the day after Trump declared 10% global tariffs, he raised the rate to 15%, the maximum allowed by law. Still to come will be lawsuits by U.S. companies seeking to be reimbursed for the billions of dollars in the illegal tariffs that they paid. Finally, are the review of the USMCA (formerly NAFTA) coming up in July, where the United States is expected to try to tighten trade rules.

While the SCOTUS decision was a setback to Trump’s imperial presidency, it by no means a return to a more free trade approach.

Both Democrats and Republicans are likely to restrict trade, in particular with China, which is surpassing the United States in one industry after another. For example, Trump used the section 301 of the Trade Act of 1974 in his first term to impose tariffs on imports from China on the basis of “unreasonable or discriminatory” trade practices by a country as found by the U.S. trade representative. These tariffs were maintained by the Biden administration and continue to this day.

Even a future Democratic administration is likely to keep major tariffs, especially since there are now industries benefiting from protection.

#SanJoseCA #CA #CapitalismAndEconomy #Tariffs #SCOTUS #Trump

This meant the rate of economic growth for the entire year of 2025 was only 2.2%, as compared to 2.8% for all of 2024. Thus, despite Trump’s claim of “the best economy ever,” Trump’s trade war with the world and his efforts at mass deportations only served to slow the economy.

The biggest drag on economic growth in the fourth quarter of October to December was a drop in spending on goods and services by the federal government. This is due to the impact of DOGE employment cuts hitting in October, and the non-payment of government contracts and their workers during the shutdown (federal workers do get paid when a shutdown ends).

At the same time, the Personal Consumption Expenditures price index, or PCE, on a year over year basis accelerated slightly from 2.8% in the September to October period to 2.9% in the last three months of the year. Taking out food and energy, whose prices rise and fall more than other goods and services, the so-called “core” PCE rose 3% in the October to December period, up from 2.8% in the previous three months.

Trump has said that the war on rising prices is done, and declared victory on the affordability front, despite the reality of consumer prices rising at a faster rate. But the Federal Reserve Bank, which uses the PCE as the measure of inflation, will be looking at the data, making it less likely to lower interest rates in the near future.

#SanJoseCA #CA #CapitalismAndEconomy #GDP

While Trump claimed that foreign companies would pay for the tariffs by being forced to cut their prices, this did not happen. This can be easily seen in the index of import prices, which was exactly the same in December of 2025 as it was a year earlier in December 2024.

Economic study after economic study said that 90% or more of the cost of the tariffs were being paid by U.S. businesses or consumers. The Trump administration finally had enough of hearing the truth, so their chief economist, Kevin Hassett, said that the authors one study (who were on the economic research staff of the New York Federal Reserve Bank) should be “disciplined.”

There are two reasons why Trumps tariffs were not able to bring back more manufacturing jobs.

If Trump’s goal was to bring back manufacturing to the United States, he needed to bring down the prices of goods and labor that manufacturing needs. Instead, he put tariffs on raw materials and intermediate goods (manufactured goods that are used to make finished products) like steel and aluminum.

Also, while Trump likes to harken back to the industrialization during the McKinley administration (1897-1901) when tariffs were high, he omits the fact that the factories of that time were filled with immigrant labor. Thus, Trump’s attempt at mass deportation and terrorizing immigrants are driving away the very workers needed to re-industrialize.

#SanJoseCA #CA #CapitalismAndEconomy #Tariffs #TradeDeficit

For all his boasting about the “world’s greatest economy,” Trump’s first year in office pales behind 2024, in the last year of the Biden administration, when more than 750,000 jobs were created, more than 60,000 a month, four times the 2025 figure. What did boom in 2025 was the stock market, with the broad index of the S&P 500 up by almost 18% that year. But half of all stocks are owned by the top 1% of billionaires and mega millionaires, while the bottom 50% of the population who have to work for a living only own 1% of all stocks.

This update on the labor market actually brings the official jobs numbers more in line with other, more negative measures of how working people are doing. Consumer sentiment surveys have cratered, the University of Michigan index going from 71.7 in January to only 52.9 in Decembe