January 20: We continue to be worse off. Data on wages shows a secular decline as indicated in the following table.
Wage growth is down significantly from its near-term peak more than 3 years ago (although it is still positive), according to the Atlanta Fed Wage Growth Tracker. Since peaking at 6.7% in 2022, it has steadily declined to 3.7% in early 2026. Wage growth is an important factor for a number of reasons, including as a component of economic growth and overall inflation.
Source: Federal Reserve Bank of Atlanta, Current Population Survey, Bureau of Labor Statistics and author’s calculations, as of February 15, 2026. Note: October 2025 data not collected by the Bureau of Labor Statistics.
Although Trump’s immigration policies have removed workers from the labor force and thereby kept the unemployment rate from falling as fast, it appears there are also fewer jobs as well. Thus, the reality is fewer jobs and lower pay. The main reason for this is Trump’s protectionist tariff policies. These same policies are behind the sudden jump in the producer price index (or PPI) to 0.5% in its latest reading. The PPI is forward looking and represents price increases in the pipeline. By contrast, the consumer price index is backward looking represents prices that have occurred a month or so previously. The inflationary build up and slowing growth rate (also recently reported) is consistent with a slowly developing stagflationary recession.
The current administration appears to be on a taxing (tariffs) and spending path that most Democrats would envy. Republicans supporting such policies along with the administrations political posturing reminds one of the politicians supporting France’s Vichy government during WWII that accommodated the Nazi’s. Such politicians could not be said to be on the side of Eisenhower, or in any way be considered Republicans. I guess if you were completely in the dark or totally uninformed you could be like Archie Bunker and praise Herbert Hoover (remember the All in the Family Theme Song) in a way that MAGA “Archie Bunker’s” praise Trump. I think we have to have relatively uniformed people in government to get where we are today. Luckily, the Supreme Court has finally come around and ruled that Trump’s tariffs are unconstitutional. This could be a great help.
Given that we continue to slide downhill economically. We are not yet in recession and investing is still on the table. Going long on growth stocks, one might consider: SANM, ORLA, SNEX, HRMY, EZPW, PAX, HLF, ARW, CRUS, CGEMY, DLX, and FSM. This approach should be accompanied with a build up of cash should a sudden pull-back or sell-off occur. One could also consider some stocks to short: SMR, LB, CCI, REXR, SMA, IRT, ARI, BMI, and ADUR comprise a list of candidates. For those wanting to retire in the distant future, some dividend growth stocks include: TIMB, BNPQY, BTI, CRRFY, MITT, OHI, PLTK, POR, SVNLY, USAC. The top ETFs are: XLI, XLE, XLB, XLU, and XLK. As always, Good Investing!
