Week VIII - Jobs, GDP, PCE, Tariffs, Ice Breakers & Headlines, and an Olympic wrap-up.
This Week’s Economic Talking Points
Three headline pieces that came out last week.
The first was encouraging – the initial jobless claims came in less than expected at 206,000.
The previous week was 229,000 with expectations of 223,000.
Keep in mind that a good jobs report is good ‘bad news’. Good, because folks are keeping jobs; bad, because unless jobs are threatened, the Fed is not going to drop interest rates.
The second was the 4th quarter GDP – the Gross Domestic Product for the U.S. It came in at 1.4%, down from Q3s 4.4%, and below the expected 2.5%.
That’s what a government shutdown will do. When the Feds don’t spend any money for a third of the quarter, that’ll make an impact.
There was also cooling consumer spending. Remember the 0% increase in retail spending I mentioned last week for December? Yep.
GDP for the year was 2.2%. That’s a solid number. Many are forecasting a 2026 GDP of 2.5%, another solid number.
Not great, not lousy. Very average, and that’s a good ‘good thing’.
Third headline: Personal Consumption Expenditures index, aka the PCE, or the Federal Reserve’s preferred method of measuring inflation, went up.
Not what a lot of folks wanted to hear.
It increased by 0.4% in December, up from 0.2% in November and above the 0.3% expected. That’s bad ‘bad news’.
Bad, because increasing inflation isn’t the best thing, and bad because increasing inflation could cause the Fed to raise interest rates down the road.
The 12-month rate went from 2.8% to 2.9%.
The Core PCE went from 2.8% to 3.0%. Since Core does not include fuel and food, that means all the other stuff had a bit of an increase.
And for good measure, personal income increased by 0.3%, but spending increased by 0.4%. Hmm. We’ll see what happens next month on that.
And that’s how we ended the week. Next week, consumer confidence and the producer price index. Drum roll….
A Word About Tariffs
Yes, the Supreme Court of the United States – SCOTUS – ruled that the administration cannot implement tariffs using the International Emergency Economic Powers Act, aka IEEPA.
But that was it.
They didn’t say the administration could never do it again. They just said that they couldn’t do it through IEEPA.
That’s why Wall Street really didn’t react.
There are other avenues for tariffs, so stay tuned.
In the meantime, companies are lining up for their refunds. That’ll be a cottage industry for a bunch of trade attorneys.
Of all the tariffs collected so far, a little under two-thirds were done using IEEPA.
Ice Breakers & Headlines
In 2025, the children’s show, “Bluey”, accrued a rather mind-blowing 45.2 billion total minutes of viewing time — still somehow slightly less than the 55.6 billion minutes it notched the year prior.
That made it the most-streamed show in the U.S.
My youngest grandson loves Bluey, while my oldest loves SpongeBob.
The middle one just likes jumping off things.
Rembrandt Nets Nearly $18,000,000 at Auction – Rembrandt being the artist from the 1600’s, and the item being a chalk drawing measuring 4.5” by 6”. That’s almost $663,000 per square inch.
The money is still out there, folks.
AI Tools Begin to Bully Humans, Raising Red Flags in Silicon Valley – All because a chatbot had written a blog post accusing an engineer of hypocrisy, being insecure and biased against AI.
It really would have been creepy if the bot had signed off with “I’ll be back.”
Higher Beef Prices Are Set to Last – U.S. cattle herds are at the lowest level in 75 years, putting the meat in short supply.
Supply & Demand – economic basics – affect prices.
Beef was up 17% from a year earlier.
Well, we are back in the 70s when going out for a steak was a real treat. In the meantime, tariffs on beef from Argentina and Brazil were reduced.
U.S. Trade Gap Broadest Since 1960 – that is the gap between imports and exports. The U.S. imports way more than it exports. The difference between the two is called the trade gap.
The December gap was $70,300,000,000, and the annual trade gap was $901,500,000,000.
The shortfall with China was the smallest in 20 years.
Still, we imported $202,000,000,000, more from China than they imported from us.
It’s official. Amazon is now the #1 retailer, beating out Walmart.
Walmart is no longer the Fortune 1 company, as ranked by sales. That belongs to Amazon.
The Olympics
The beauty of sports is that the final score is exactly that – final, and that is how success is measured. The score is the score, and the Olympics can be brutal in that regard.
It only happens every four years, so the pressure is on. Most perform well, and some don’t.
The top five final tally of medals is: Norway at 41 medals, the USA at 33, and the Italians, with home ice advantage, come in at 30. Germany and Japan round out the top five with 26 and 24 medals, respectively.
The best Italy had ever done was in 1994 with 20 medals.
Norway unleashed a Klaebo. Every event this fellow entered, he won, including two team events. Every Olympics has a star, and this Olympics had Johannes Klaebo; he won 6 gold medals.
I’m not sure what the official stats are, but there certainly seemed to be a lot of 30+ year olds winning or medaling. Maybe I’ll AI that. Or not.
Three individuals over 40 won gold medals. Prior to Milan, only one athlete over 40 had won a gold medal, ever.
Standouts are members of the women’s bobsled team.
Elana Meyers Taylor, 41, won gold in the monobob (that’s a bobsled with one person in it). She set the record for the oldest gold medal winner in a winter Olympic event.
And she did it by 0.04 seconds.
Kaillie Armbruster Humphries, 40, won bronze in the monobob and the 2-woman bobsled.
And for the first time since Lake Placid in 1980, the United States men’s hockey team won Olympic Gold in overtime, beating Canada 2-1.
The U.S. Women’s team won gold as well, but its drought wasn’t nearly as long: they won gold in 2018. However, the game was equally competitive, with the U.S. also beating Canada in overtime, 2-1.
It was a wonderful Olympics for American hockey; not so much for Canadian hockey.
There are so many motivating moments from the Olympics for us mortals. One that comes to mind is the quote from Nick Baumgartner, a 44-year-old snowboarder from the U.S., “It takes every bit of me and every bit of effort that I have to be able to compete with these kids… If you find something you love, it doesn’t matter how much work you gotta put in, you’re happy to do it.”
Another is the men’s hockey final. Jack Hughes was hit in the mouth with a Canadian hockey stick in the third period and had at least a couple of chipped teeth and one that was knocked out. Was he carted off? No. He skated to the bench, rinsed out his mouth, and came back on, ultimately scoring the winning goal in overtime.
Finally, the value of taking a break. Exhibit One is Alysa Liu, the 20-year-old U.S. women’s figure skater who won gold this past week by taking two years off, from 2022 to 2024. She decided to skate again, not because she had to, but because she rediscovered the love of it. The result? The first gold medal in women’s ice skating since 2002, and she smiled the entire time.
The point? The obvious one is getting up when you get knocked down – that is demonstrated constantly in championship situations, but is borne of everyday practice and rehearsal and a will to not be conquered. The second point is that doing what you do is a lot easier when you like doing it. Can you do it if you don’t like it? Of course, but it just won’t be the same. If you stop liking what you're doing, take a break, and that passion may come back, and you’ll be better for it.
Citius, Altius, Fortius.
