My examination of economic trends has been sparse of late given my workload. But, current economic news, as most people are reading, is not good. Examining that news up close paints an even worse picture.

As Jake in Wisconsin has been pointing out for some time, job market trends started declining in 2025 and then nose dived in early 2026. Along with the downward job estimates in early 2026, these reports coincided with major revisions to the initial 2025 numbers — nearly 900,000 previously reported job gains were eliminated in those revisions — and current job gains mostly in health care masked the flat or even declining jobs in other sectors of the economy.

Indeed, in Wisconsin the job numbers in general now show a sharp decline in 2025 with those revisions.

To compound this problem with slowing or even declining job numbers, the Gross Domestic Product in the last quarter of 2025 only grew by 1.4%. Wages on average, however, grew significantly in 2025. But, this growth in average wages last year would well be because of higher income among those at the top of the economic ladder rather than the growth among low-wage and middle-income workers that occurred in 2020 through 2022 (when growth is really only occurring at the top of the economic ladder, that growth is called plutonomy).

Before the war in Iraq started up, the job numbers in March 2026 hit their lowest non-Covid level in fifteen years. For Wisconsin, the job numbers are no where near what was originally predicted. Furthermore, the jobs numbers now show that Wisconsin manufacturing has been in steady decline since the summer and fall of 2022.

What has kept the economy afloat despite the flattening/declining job market is that higher gas prices have yet to slow down consumer spending. People simply are spending more because gasoline prices are higher, even though their incomes (outside of farmers) are generally flat. In other words, people are dipping into their savings or borrowing more money to make financial ends meet. As Jake explains:

Put all this together, and add in the fact that unemployment claims are somehow going lower at the end of April, and I’d argue that we are in a “‘flation” stage of the stagflationary cycle that is reality in much of America. While the Federal Reserve stayed pat this week and didn’t even change their wording about risks or plans for future rate cuts (albeit with some dissenters on the Board). I have to think that more declines in savings and continued inflation for Q2 2026 will lead to changes at the next Fed meeting in mid-June.

For businesses, on the other hand, productivity numbers showed strong gains at the start of 2026. As already evident from the jobs and wage numbers, those productivity gains have not led to any increase in wages or employment. Instead:

Real hourly compensation, which takes into account consumer prices, decreased 0.5 percent in the first quarter of 2026, and [only] increased 1.4 percent over the last four quarters [of 2025]. The labor share, which is the percentage of output that accrues to workers in the form of compensation, was 54.1 percent in the first quarter of 2026, the lowest recorded value since the series began in 1947.

Yikes! The economy is NOT doing well at all and getting worse every month.