Buried Job Losses Prove a Stealth Recession Has Been Haunting us All along!
Trump's "Golden Era" only gilds the upper arm of the K-shaped economy, and "Big Beautiful Bill" and his fat and spendy siblings are a hyuge part of the problem.
The truth about the economy has been buried for a few years in flawed statistics and shielded from view by the high gloss of easy gains for the rich. The real economy has been crushing down on the masses for more than two years. And now, we have a broad enough look at the revised stats to prove the stealth recession has been riding the backs of the tired and huddled masses for a long time, and it’s only getting worse. I’ll prove it here at last with the basic facts that matter most.
Trump promised a new golden era. In fact, he announced that we are already in it, but Americans aren’t buying it. I mean that literally and figuratively, and I’ll show why.
Literally, they are not buying, period: “Retail sales slump as consumer spending falters.” That’s our current starting point-of-reality on this backward-looking quest for truth about why the economy is worse for most than what they are told. How much worse than told is the reason the rich have referred to this period as the most hated “expansion” in history. You’ll see why it was far from a real expansion for most of America in considerable detail.
In a significant development for the U.S. economy, retail sales have experienced an unexpected decline, according to the latest data release. Retail sales, which serve as a critical indicator of consumer spending and overall economic health, fell by 0.6%. This decline is notably below the forecasted growth of 0.1% and marks a deterioration from the previous month’s increase of 0.2%….
As retail sales account for a substantial portion of economic activity, this downturn could signal broader economic challenges ahead…. The actual figure of -0.6% indicates a more significant contraction in consumer spending than previously anticipated.
Consumers cutting way back on their retail spending is not the kind of activity that indicates anyone is feeling like they have entered a golden era or have been living through a period of economic expansion in their neighborhoods. They are downvoting that idea with their dollars and their feet by walking away from retail. It’s a clear sign of economic unease, and the first that we’ve measured in terms of consumer activity. Until now, people have been maintaining the lifestyle they are used to in the face of constant rising inflation by taking out more debt; but as debt defaults are rising quickly now, that method of continuing one’s behavior is giving way to curbing one’s behavior.
Not believing it either
Figuratively, Americans are not buying the golden era, as in not believing in it, because there is nothing there to believe in. Only 30% of Americans, based on the latest poll, approve of Trump’s handling of inflation, while 31% listed inflation and prices as their most important issue, 17 percentage points more than the second-most important topic, jobs and the economy. Americans are concerned about inflation (made worse by tariffs, in spite of the lies Team Trump tells on that matter) and about jobs.
So, inflation is the driving concern of the majority right now, and jobs come second. Does the arrival of a golden era for a return of manufacturing to the US and the jobs that go with it, as Trump has claimed for his tariffs on foreign goods, graph out like this:
Trump promised his tariffs would cause factories to return to America, which he said would be a boon for American jobs and wages. Since then—even with the AI datacenter buildout, which is creating demand for manufactured materials—we have seen nothing but a steepening decline in factory construction. After a year and half, there is no sign yet that more factories are moving here from afar.
As we enter the election cycle, Republican politicians are growing nervous, so they want Trump to offer their usual tired stimulus ideas to boost the flailing economy to try to save them at the polls. They want him to offer even more tax cuts. Never mind how severely the last tax cuts (Big Beautiful Bill) did NOT pay for themselves with economic growth (as you can get a clue about from what is happening with manufacturing expansion in the graph above). Never mind that those massive tax cuts, along with Trump’s massive tax increases in the form of tariffs, increased the rapid bloating of our national debt that is now treading near the insane $40-TRILLION level thanks to rapidly growing war expenditures. Empire doesn’t come cheaply as we spend ourselves into a grave of our own digging.
It’s a solution that is so tried and tired it should be mummified by now. It’s an endless effort to try to get quick, easy growth by paying for NOTHING as we go and sending the bill into the future for our children or grandchildren to pay. It has been an endlessly reckless path. Cutting taxes when they are extremely high makes sense. Cutting taxes when you’ve already cut them to the bone makes no sense when your nation is now getting crushed under its own debt, unless Trump were to do it by getting rid of his business-killing tariffs.
Go back and look at the latest news in The Daily Doom headlines about Treasuries this week to see what is happening there due to expanding debt and the tariffs resulting in diminished need in the marketplace for foreigners that are doing less trade with us to bank US dollars in Treasuries. It is rapidly looking like a disaster that will only grow worse if we cut taxes as our debt to GDP ratio is now at 123%.
Of course, most of Trump’s huge initial tax cuts inured to the filthy rich, by which I do mean “filthy,” given how they are cavorting with presidential buy-ins in the most extreme amounts ever seen, becoming a part of the $2.2-billion added to the president’s wallet over the past year (though much of that visible gain was through his apparent insider trading on war announcements) while getting some nice contracts for their pay-to-play bribes that come in the form of buying his crypto or buying memberships at Mar-a-Lago or promising to help cover the costs of his billionaire ballroom legacy expansion to the now comparably tiny White House.
Thus, we live in the “K-shaped economy” where it is true that the billionaires ARE experiencing a golden era befitting all the extra gold gilding/spray paint added to Washington statuary and White House decor. For those of us who live on the lower leg of the “K,” more tax cuts of the kinds Trump and the Republicans gave last time aren’t going to help much because they clearly are not—once again—trickling down as promised.
If the president is going to cut taxes, the ones he should cut would be all of his tariffs that add inflation to the prices we all pay since 94% of the total amount collected in tariffs was born for by US citizens/businesses, while only 6% was offset by price cuts from foreign suppliers.
Marc Short, who served in the first Trump administration, [says Republican politicians] “are reluctant to criticize, because they think the president will come after them, but ultimately I think a lot of their voters want to see them stand up for their interests” on issues like trade…. Trump has plenty of achievements to highlight but “it’s hard to argue that his tariffs are not contributing to the affordability problems….”
Many economists say the higher costs from Trump’s tariffs and uncertainty around them have held back hiring as well as potential investment, especially outside of AI. The US added 16,000 manufacturing jobs in the past two months, but up to that point it had lost almost 100,000 in Trump’s second term. Factory construction is also down from the record it reached in 2024 after Biden-era incentives….
There are intense election-season debate around many other aspects of the US economy, including how “K-shaped” — skewed toward the rich, and hence against most voters — it is.
Bessent told CNBC last week that “the K-shaped economy is over” and he’s “sick of hearing” about it. (“Trump’s ‘Golden Age’ Economy Pitch Fizzles with Midterm Voters”)
Well, of course, he’s sick of hearing about his abject failures, but it is about as over as the Iran war was over based on his assurances some 45 times over the past few months. With Iran saying, as I reported yesterday, they intend to keep the war hot until the end of Trump’s term so as to make it clear that he got nothing for going to war with them but an endless headache, anything Bessent says should be immediately dismissed as part of his endless smarmy lies. He doesn’t want to hear about the bottom leg of the “K” as he reclines comfortably on the heights of the “Ks” upper slope.
Other measures suggest disparities persist, with hourly earnings for nonsupervisory and production workers lagging behind inflation. New stock-market wealth flows mostly to already-prosperous Americans, and that group also stands to benefit most from any proposed cuts in capital gains taxes.
Always.
Ah, life on the upper slope which already benefits massively from capital gains tax cuts, and which benefited before that by the fact that all asset gains are as tax-deferred as a 401k until you actually cash them in. So, the Republican plan, being championed as usual by Krackhead Kudlow, Trump’s former economic ill-advisor, is for more capital gains tax cuts to try to boost the trickle that is supposed to run down the K’s lower leg (like an old man lacking bladder control). What you get from trickle-down tax cuts is—pardon the clarity, but it’s accurate to the motif—pissed on by the rich.
The tariffs obviously aren’t bringing in a bumper crop of new manufacturing jobs so far; and, with consumers now cutting back on spending, there is even less chance of more manufacturing plants being built in the US. With inflation set to grow again (having only cooled off a mere 0.1% during the fake schmeasefire that temporarily brought down oil prices), this all looks and smells a lot more like stagflation.
The new president promised to bring down prices “on day one.” Instead inflation has accelerated again this year.
Wages have gone soft in the latest report, rather than improving, which Trump said would be our bonus from tariffs heating up the manufacturing sector. The latest jobs report was the worst for wages so far. Even worse than that, however, was what the latest reports showed about actual jobs. They have suddenly fallen through the factory floor. So, let’s talk about that …
Where have all the promised jobs gone?
The latest headline was NOT GOOD for Republican politicians (or for any of us really):
"Job losses in July and negative revisions reveal a weakening U.S. labor market”
This report was so bad that we actually had a net loss in jobs, rather than what has become a fairly common diminishing gain each month. Then there’s the part about the last two job reports being revised down in this present report, which is so typical to what I’ve been telling you about how the government only makes the facts real (in a downward direction) after they are no longer the primary facts in focus. The policy is to give a better report today; revise it down to reality in a month or two when people are paying lest attention to months further back. Here we see that happening again as business as usual.
In a troubling sign for the economy, the Bureau of Labor Statistics said that it revised down the prior two months’ jobs by a combined 103,000.
Those months were, as I reported here, already languishing. Now they are pathetic. Yet, they are nothing compared to how bad the latest month is or how, the deeper you look into this report, the worse and worse it gets:…
