Economy

Consumer sentiment data shows that it increased in December, but by less than expected.

The University of Michigan’s final December sentiment index increased at the end of 2025 by 1.9 points to 52.9, according to a report released Friday said, cited Bloomberg.com.

Bloomberg said that its survey of economists called for a reading of 53.5.

“Despite some signs of improvement to close out the year, sentiment remains nearly 30 percent below December 2024, as pocketbook issues continue to dominate consumer views of the economy,” said Joanne Hsu, director of the survey.

It means that the "conditions gauge" slipped to 50.4 points, despite expectations being at a four-month high.

"Consumers’ perception of current buying conditions for big-ticket items deteriorated to the lowest on record," said the report.

Speaking to CNBC's "Squawk on the Street," Rick Santelli said he has data going back to the 1970s and things aren't looking good.

"So, the mid-month read gets tossed, 53.3 was the mid-month read on the headline. It now moves lower to 52.9. That would be the weakest since it was 51 in November. And I'd like to point out that if you look at the absolute low, it is 50 from June of 22. We're not far away from the low," Santelli warned.

"Now, if we look at current conditions, same dynamic 50.7 mid-month becomes 50.4 and 50.4 is a new all time low, replacing the 50.7. Also, my database goes back into the 1970s. Look at expectations. Same dynamic," he added.

"Mid-month 55 now becomes 54.6, and 54.6 would be the weakest since November, when it was 51. And finally, on the inflation front. Well, 4.2 replaces 4.1. it's one tenth hotter on the one year inflation. On the 5 to 10 year inflation rate. It remains the same at 3.2 percent," Santelli rattled off.

The news comes after economists questioned November inflation data showing that inflation fell.

During his presidential speech on Wednesday night, December 17, Donald Trump forcefully defended his record on the economy. Trump claimed that inflation soared under his predecessor, Democratic former President Joe Biden, but has plummeted since his return to the White House almost 11 months ago.

Voters, however, are giving Trump low marks on the economy in poll after poll.

A recent Associated Press/NORC poll found that only 31 percent of Americans approve of Trump's handling of the economy (AP), and in an Emerson College poll, 36 percent of respondents gave Trump an "F" on the economy.

In an article published by the National Review on December 19, conservative/libertarian scholar Jack Salmon — a research fellow at the Mercatus Center at George Mason University outside Washington, DC — warns Republicans that Trump's poll numbers will continue to suffer as long as voters are feeling frustrated over inflation.

"This week's release of the latest Consumer Price Indices underscores the one issue area where polls consistently show President Trump performing particularly badly," explains Salmon, who has also conducted research for the libertarian Cato Institute. "It isn't immigration, it isn't trade, and it isn’t even the overall handling of the economy. It's the cost of living, or inflation."

Salmon continues, "The president's net approval rating on the first three issues ranges from −5 percent to −17 percent. On inflation, voters give the president a net approval of −28 percent, with nearly two-thirds disapproving. It's easy to see why. Year-over-year inflation, stuck at 2.7 percent as of November, remains well above the Federal Reserve's target of 2 percent. The underlying drivers of that inflation remain cause for concern today — namely, out-of-control deficits and a rapidly growing national debt."

The scholar, citing New York Federal Reserve Data, notes that consumers "expect inflation to be above 3 percent a year from now." The "cost of living," he adds, "is the issue that will likely decide the outcome of the 2026 midterm elections."

"If the inflation surge of the last few years taught us anything," Salmon argues, "it is that nothing topples a government's political standing faster than rising prices. Unless policymakers change course, voters will once again make their discontent unmistakably clear."

Jack Salmon's full article for the conservative National Review is available at this link.

White House staff are hoping President Donald Trump’s executive orders will start delivering visible results in the new year, because the broader economic agenda is still being developed.

NOTUS reported Friday that a senior White House official said they have a “whole list” of plans; however, they are "still under development."

Trump is headed to a newly drawn North Carolina congressional district on Friday to tout his "affordability tour." The Associated Press reported that voters there are feeling the squeeze.

“Having to pay bills, if you happen to pay rent and try to do Christmas all at the same time, it is very, very hard,” said Daijah Bryant, who noted she'd just worked 22 days straight.

“Everyone would love immediate gratification, but that’s just not how it works,” a senior White House official told NOTUS. “It’s going to take some time.”

It's a sharp turn after Trump's campaign promise to Americans that, on "day one," he would end inflation and cut prices.

“Starting on day one, we will end inflation and make America affordable again, to bring down the prices of all goods," Trump told a Montana audience in Aug. 2024.

“Under my administration, we will be slashing energy and electricity prices by half within 12 months, at a maximum of 18 months," he promised at a North Carolina rally the following week.

In the same speech, he pledged, “Prices will come down. You just watch: They’ll come down, and they’ll come down fast, not only with insurance, with everything."

Forbes detailed 20 signs that the affordability crisis persists and Trump hasn't delivered. They include high energy costs, food costs, housing prices, insurance increases and utilities, to name a few.

According to NOTUS, "the White House is hoping that while the larger plan takes time to bake," the Trump executive orders will magically make life more affordable and ease economic pain.

Another plan in the works, according to former Heritage Foundation economist Stephen Moore, is to eliminate the capital gains tax, which is the tax on profits people get when they sell their home.

Moore agrees that staying the course and waiting for things to improve is the best plan.

“I think that the best strategy is just keep doing the right thing on the economy, keep cutting taxes, cutting regulation, reducing waste in government, producing more energy,” Moore said. “All those things eventually will turn the tide.”

Read the full report.

During the United States' 2012 presidential race, conservative GOP nominee Mitt Romney and incumbent Democratic President Barack Obama aggressively debated one another on economic policy. And they had more than their share of disagreements. Ultimately, voters — still feeling pain from the Great Recession — trusted Obama more on the economy, and he defeated Romney by roughly 4 percent in the popular vote while picking up 332 electoral votes compared to 206 for his Republican challenger.

But Romney, in an op-ed published by the New York Times on December 19, has a recommendation that is more likely to come from Democrats than Republicans: raise taxes on the ultra-rich.

"Social Security and Medicare benefits for future retirees should be means-tested — need-based, that is to say — and the starting age for entitlement payments should be linked to American life expectancy," argues Romney, a former U.S. senator and ex-Massachusetts governor. "And on the tax front, it's time for rich people like me to pay more. Our roughly 17 percent average tariff rate helps the revenue math. Doubling it — which seemed possible shortly after 'Liberation Day' — would further burden lower- and middle-income families, and would have severe market consequences."

Romney continues, "I long opposed increasing the income level on which FICA employment taxes are applied; this year, the cap is $176,100. No longer; the consequences of the cliff have changed my mind."

The conservative notes some "loopholes" in the U.S. tax code that enable ultra-wealthy Americans to significantly lower their tax burden. And he is critical of the Trump Administration and the Department of Government Efficiency (DOGE), saying that DOGE took a "slash-and-burn approach to budget cutting and failed spectacularly."

"I believe in free enterprise, and I believe all Americans should be able to strive for financial success," Romney argues. "But we have reached a point where any mix of solutions to our nation's economic problems is going to involve the wealthiest Americans contributing more. Of course, a much faster growing economy would save us from the debt cliff. This truism has long rationalized politicians' failure to act: Faster growth, promised with tax cuts, is always just around the corner, but that corner never arrives."

Romney adds, "Yes, taxes can slow growth. But most of the measures I propose would have a relatively small impact on economic growth. If my party wants to be the one to give working- and middle-class Americans greater opportunity — to be the party that is trying to restore some sense of confidence in our capitalist system — this would be a start."

Former U.S. Sen. Mitt Romney's (R-Utah) full op-ed for The New York Times is available at this link (subscription required).

Financial columnist and CNBC co-anchor is urging folks to put the brakes on before they invest in artificial intelligence.

Speaking to MS NOW's "Morning Joe," Andrew Ross Sorkin discussed his book "1929," which explores the first stock market crash that triggered the Great Depression. It prompted him to warn viewers that "understanding the economics in the AI boom" is necessary in order to prevent a "bust," which, he said, is a possibility if the financial system is too "leveraged."

The Bureau of Labor Statistics released new data on Thursday showing November's numbers, but it may not tell the whole story due to some missing details.

With the information provided, Joe Scarborough said it showed a "cooling" in the inflation rate and cited the rising jobless rate.

"I think we have to look at this particular number with skepticism, this idea that we've had inflation come down so materially on the [consumer price index] number, I think has a lot of people scratching their heads, quite surprised," said Sorkin.

Sorkin also said that it's possible some of the pricing numbers came from late November when things were heavily discounted for "Black Friday."

He predicted that he would not have accurate numbers for another month.

One of the key points in Sorkin's book is that he notes just how much was "missed" in 1929. He was asked what he thinks analysts are missing today.

"Oh, goodness," Sorkin began. "I think the things, if we're missing something, is really just understanding the economics of what's happening in the AI boom in order to prevent, hopefully, a bust. To understand some of the leverage where the debt is inside the system right now, I think, unlike even in 2008, it is very hard right now to understand how much leverage, how much debt, how much borrowing is going on."

The reason, he said, is that after 2008, major borrowing from big banks no longer works.

"Frankly, because of a lot of the regulations we put in place, this entire other industry known as the shadow banking system, known as private credit, has emerged," said Sorkin. "And in that world, there is very little disclosure. And so we just don't know. And I think that is the piece of it. Even inside the Federal Reserve, I would say they don't even know really how intertwined and how much leverage is in the system."

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Inflation unexpectedly fell to 2.7% in November, according to the just-released report from the Bureau of Labor Statistics, but economists, while cheering the drop from 3%, also are warning that data is missing from the calculation due to the shutdown. Experts had forecasted a rise to 3.1%.

Navy Federal chief economist Heather Long noted that 2.7% is the “lowest since July,” while warning that the number was impacted by the shutdown.

“There is almost no October inflation data due to the shutdown and some impact on November data collection as well.”

“So much is missing…” she wrote, offering this visual.

“We always want to see inflation numbers that are down,” Claudia Sahm, a former Federal Reserve Board economist, told Yahoo Finance. “So, you know, downsides surprises are better than upside surprises.”

But she stressed, “I think it is extremely important to take this release with a big grain of salt.”

Pointing to the federal government shutdown, Sahm warned that the data collection “was really disrupted by having a month off in October. And so I think we’re just gonna have to see more data next Monday before we really start running with this lower number.”

Goldman Sachs’ Lindsay Rosner went even further.

“I think it may even be more than a grain” of salt, Rosner said. “I think it may be an entire bag.”

Rosner, as have others, stressed that due to the shutdown, numbers for prices collected were largely for the end of November — which included Black Friday sales.

“One thing I’d point out in particular, that I think will really resonate with the listeners, is that the sampling for November, specifically, was focused around the timing of Black Friday,” she said. “We all know how good the sales were. And so when you look at those numbers, yes, it’s gonna look like prices were lower, so this soft optic number of inflation seemingly lower, while we really would like to get excited about it — I don’t think it’s deserving of excitement.”

Professor of Economics Justin Wolfers, a frequent cable news guest, summed it up:

“1. It looks like the labor market has frozen 2. It looks like inflation is cooling,” he wrote. “We can’t be sure of either trend given shutdown-related distortions to data collection. But… it surely pushes the Fed toward cutting rates again.”

In his new book, "1929: Inside the Greatest Crash in Wall Street History — and How It Shattered a Nation," financial journalist Andrew Ross Sorkin examines the conditions on Wall Street that preceded the Great Depression of the 1930s. And Sorkin, a CNBC host and New York Times columnist, also offers some lessons that the 1929 crash offers on the U.S. economy and artificial intelligence (AI) during Donald Trump's second presidency.

Never Trump conservative George Will examines Sorkin's book in his December 17 column for the Washington Post, adding some of his own insights on the state of the Trump-era economy.

"New York Times financial columnist Andrew Ross Sorkin has kicked a hornets' nest by writing '1929,' his lively retelling of what preceded the crash, and what the crash precipitated," Will explains. "It is about the consequences of the crash itself that the hornets are being heard from…. Read Sorkin for fascinating details about the 1920s stock-buying mania. And for perspective on what today's animal spirits are producing in artificial intelligence investments."

Will adds that although the New York Times "did not rank the crash the top story of 1929," a "lost decade followed."

"Sorkin and the hornets can debate the causation," Will comments. "Now, about today."

Will goes on to note The Economist's warnings about the U.S. economy in an article published on November 15, drawing parallels between their analysis and Sorkin's.

"The Economist says, 'If America’s stock market crashes, it will be one of the most predicted financial implosions in history,'" the conservative columnist writes. "Stocks are 21 percent of households' net worth, and AI-related assets 'are responsible for nearly half the increase in Americans' wealth over the past year.' And 'a fall in stocks comparable to the (early 2000s) dotcom bust would reduce Americans households' net worth by 8 percent. That could cause a big retrenchment in consumer spending.' This will be messy."

George Will's full Washington Post column is available at this link (subscription required).

Journalist Matt Johnson drew criticism on the left when he wrote a book passionately defending the late British author Christopher Hitchens and came down hard on political correctness. Many progressives viewed Hitchens as a former leftist turned neocon, but in "How Hitchens Can Save the Left: Rediscovering Fearless Liberalism in an Age of Counter-Enlightenment," released in early 2023, Johnson argued that liberals and progressives needed to take a closer look at some of Hitchens' ideas rather than dismissing everything he had to say.

Although Johnson is highly critical of President Donald Trump, he also urges the left to understand the reasons he resonates with his supporters. And in an article published by the conservative website The Bulwark on December 17, Johnson lays out some reasons why Trump is performing so badly in polls — including his overreach and a betrayal of the economic issues he campaigned on in 2024.

"Thirty years ago," the journalist/author explains, "the political scientist Christopher Wlezien proposed the 'thermostatic' theory of politics. In short: If policy goes too far in one direction, voters will send signals to push it in the opposite direction, over time maintaining a rough equilibrium. This effect shows up in public opinion polls on a variety of topics, from immigration to economics to foreign policy. Although Donald Trump has demonstrated that he's uniquely capable of breaking democratic norms, he may finally have swung the pendulum too far on all of these issues."

Johnson continues, "There are indications that, in thermostatic fashion, Americans are responding to Trump's attacks on every value, institution, and tradition of American politics by regaining their appreciation for why and how our system works. Trump's dismal approval rating suggests that Americans were expecting more from his second term. Voters returned him to the Oval Office because he promised to make their lives more affordable, but he did the opposite by erecting the highest trade barriers the United States has had in a century."

Johnson notes that according to a recent Associated Press/NORC poll, only 31 percent of Americans approve of Trump's handling of the economy — and that a recent Politico poll found that only 22 percent of Trump voters believe his steep tariffs are economically beneficial.

"Plummeting economic numbers should be a political emergency for Trump, as the economy was by far the issue that mattered most to voters in 2024," Johnson argues. "Inflation has been rising since April —when Trump announced his 'Liberation Day' tariffs — while the labor market is cooling and unemployment is rising. Although tariffs have generally come down since the eye-watering levels announced on Liberation Day, the average effective tariff rate is 18 percent — the highest since 1934…. It has become increasingly clear what unrestrained Trumpism means for the country: corruption and cruelty at home, incompetence and anarchy abroad. Trump likes to present himself as the reckoning for decades of elite failures, but he’s in for a reckoning of his own."

Matt Johnson's full article for The Bulwark is available at this link.

Combined with other factors, President Donald Trump’s big tariffs on Chinese goods are costing Ohio farmers and their counterparts in other states heavily, according to a new report.

The report shows Ohio farmers lost nearly $76 million of their exports to China this year compared to one year earlier.

Tariffs are taxes on imports, and since the start of his second term, Trump has imposed a shifting array of them on every country in the world — except Russia for some reason, according to the Atlantic Council’s Tariff Tracker.

Economists have said the unpredictability of the measures has slowed some business investment because decision-makers can’t plan. And surveys conducted by the Federal Bank of Cleveland show that regional businesses are seeing higher input costs from them and many are raising prices for their customers.

That’s not helpful as Republicans struggle to deal with a national affordability crisis.

Farmers have faced a double whammy. They’ve seen many of their costs go up because of the import taxes.

Meanwhile, China — the country’s third-largest trading partner — stopped purchases of American soybeans in May before resuming them last month. The stoppage was in retaliation for the tariffs Trump imposed that now are at 20%, according to the tariff tracker.

That could do lasting harm to Ohio soybean producers by pushing China to grow and cement its trade ties with Brazil — another major producer.

Trump imposed 50% tariffs on the South American country in retaliation for imprisoning an authoritarian president who attempted a coup.

Ohio farmers are feeling the pain.

Steady trade relations with China had already been roiled during the first Trump administration, according to Farm Flavor, a media organization that reports on agriculture.

“Over the past decade, the flow of American agricultural goods to China has shifted from reliable seasonality to stark volatility,” it said in a report that was released on Tuesday.

“From 2014 to 2017, exports followed a predictable rhythm throughout the year, peaking each fall with the soybean harvest. That pattern broke with the onset of the 2018 trade war, then rebounded sharply in 2020 and 2021 after the Phase One trade agreement. With Chinese purchasing commitments in place, monthly exports hit record highs in late 2020 and remained elevated through 2022 – fueling optimism that the relationship had stabilized.”

Then in 2023, Brazil saw record soybean and corn harvests, undercutting prices asked by U.S. farmers. And in the wake of the first Trump trade war, China worked to “de-risk” its agricultural supply by strengthening ties with South America, the report said.

“By 2025, these forces — combined with a renewed trade war — converged into a full collapse,” it said.

“After steady declines in 2024, U.S. agricultural exports to China fell by more than half in the first eight months of 2025. The low point came in May, when monthly exports dropped to just $247 million – the lowest level in over a decade.”

Analyzing export data from the U.S. Department of Agriculture, the Farm Flavor report said that Ohio farmers were the 13th hardest-hit, losing nearly three-quarters, or $76 million, of their exports to China this year compared to a year earlier.

Ohio soybean farmers bore the brunt, losing 85% of their exports to China.

Six of the 10 hardest-hit states voted for Trump last year, and the administration might be feeling the heat. Last Tuesday, the president announced a $12 billion bailout of the sector.

But skeptics questioned how a one-time expenditure will make up for a systemic loss that already dwarfs the bailout.

Agricultural trade with China alone is $17 billion less this year than it was last, or 42% more than the total bailout.

Nearly across the board, U.S. agricultural exports to China have been way down this year compared to their 2024 levels, according to USDA data compiled by Farm Flavor.

A sampling, listed in order of total volume:

• Soybeans — 53%
• Cotton — 89%
• Beef — 54%
• Pork — 20%
• Wheat — 100%
• Tree nuts — 88%
• Dairy products — 2%
• Corn — 99%
• Hides and skins — 34%