Financial FAQs

“Both total nonfarm payroll employment (+50,000) and the unemployment rate (4.4 percent) changed little in December, the U.S. Bureau of Labor Statistics reported today. Employment continued to trend up in food services and drinking places, health care, and social assistance. Retail trade lost jobs.” BLS.gov

FREDpayrolls

We’re now seeing the first ‘clean’ results of the damage to the job market since the 42-day government shutdown in the December unemployment report.

Approximately half the jobs are being created than before the April 2 tariff announcements that is shown in the FRED graph of total nonfarm payroll jobs. That will not make those who are looking for work happy. There are fewer available jobs, in this instance.

Employment continued to increase in food services and drinking places, health care, and social assistance. But retail and everything else lost jobs.

The bottom line is payroll employment rose by just 584,000 in 2025 (an average monthly gain of 49,000), less than the increase of 2.0 million in 2024 (an average monthly gain of 168,000), said the Bureau of Labor Statistics.

Our population may be shrinking, but not enough to absorb all those looking for work—not just to replace the jobs lost to the tariffs, but replacing those jobs lost from deported workers.

There are fewer agricultural workers to harvest the crops, for instance. What does that do to grocery prices? According to Michigan State study cited by The Idaho Capital Sun, more than half of surveyed farmers said in 2021 that they were experiencing some sort of worker shortage, It found that when domestic farm employment declines by 10%, food prices of labor-intensive crops increase by around 3%.

We can now see the damage Trump’s attempt to make his own laws is doing to the U.S. economy. He cannot legally levy most tariffs that haven’t been approved by congress. They are supposed to be negotiated by the trade partners involved, not by executive order.

That’s why Trump has driven up prices on housing construction and auto manufacturing, for instance, because of higher tariffs on steel, aluminum, and lumber, and why the goods producing sector, such as in manufacturing and construction, lost -21,000 jobs in December.

But consumers in the top 10 percent income bracket with assets in real estate or the financial markets are continuing to dine out and travel, as I’ve been saying.

Employers aren’t hiring more workers, in other words. Those taking part-time jobs because they couldn’t find full-time jobs rose 980,000 and those that want jobs but haven’t been looking for jobs recently rose 684,000 in 2025.

Businesses are supposed to expand and hire more employees this year because they can write off capital expenditures in the same year they are spent in Trump’s new tax law.

But AI cannot replace all those jobs that businesses will need to grow this year and beyond, because it takes time to automate production, though the stock prices of those AI companies that have been rallying of late don’t know that yet.

So the question will be can consumers still shop and spend as they did last year, which is why GDP growth of late is surging? Will the level of consumer spending, capital investments, and higher exports hold up unless companies begin to hire more workers?

A lot of consumers are already unhappy with the higher prices in everyday items. This is even though University of Michigan’s first New Year’s gauge of consumer sentiment rose to 54 in a preliminary January reading from 52.9 in the prior month.

It is the second straight gain and the highest level of sentiment since September. Consumers perceived some modest improvement in the economy, the survey found, although sentiment remains nearly 25% below last January’s reading, said MarketWatch’s Greg Robb.

So this year may be a tossup, in spite of the chaos sewn by a President who doesn’t seem to know or care about basic economic truths. There’s a bit of irrational exuberance in this New Year, so that consumers may keep shopping and corporations make record profits.

The question is what they will do with those profits; expand their markets by hiring more employees or buy back stocks to keep elevate their profits and that of their stockholders?

Harlan Green © 2026

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