The Morning Sixpack - May 1, 2025
It's the economy, Stupid Trump. Tariffs are stupid, too.
Surging Jobless Claims Signal Economic Trouble Ahead
Jobless claims in the U.S. have spiked to 241,000, exceeding expectations and serving as another potential red flag for the shaky economy.
The Department of Labor reported that initial unemployment filings for the week ending April 26 surged by 18,000 compared to the prior week. This marked a significant increase from the Dow Jones estimate of 225,000 and was the highest since February 22. Continuing claims also saw a rise, reaching 1.92 million, the highest level since November 2021.
Much of the recent uptick in claims can be attributed to a large jump in New York, where filings more than doubled to 30,043. While no specific reason was provided for this surge, it’s a notable outlier in the data. Meanwhile, the District of Columbia also experienced a modest increase in claims after a significant rise earlier in the year, following federal workforce reductions under President Trump. Thanks, DOGE!
This rise in jobless claims comes on the heels of another troubling economic indicator: GDP contracted at a 0.3% annualized rate in Q1, marking the first decline in three years. The drop was largely fueled by a surge in imports ahead of Trump's tariffs, coupled with a slowdown in consumer spending and government outlays.
Despite these troubling signs, the four-week moving average remains relatively steady, with claims sitting at 226,000. Looking ahead, the Labor Department’s nonfarm payrolls report on Friday will shed light on whether the labor market is truly in a downturn.
Source: CNBC
I predict the jobs news tomorrow will be bad.
Trump's Trade War Backfires as U.S. Economy Shrinks and China's Grows
In a crushing blow to President Trump's trade strategy, the U.S. economy contracted by 0.3% in the first quarter of 2025, while China posted an unexpected economic growth of 5.4%.
This marked the first contraction in three years for the U.S., just as Trump was celebrating his 100th day in office and pushing for new investments in America. His trade war, particularly the tariffs on China, is backfiring, with the U.S. suffering from a surge in imports as businesses rushed to stock up before the tariffs hit. Meanwhile, China's economy is benefiting from its strategic export surge ahead of the new tariffs.
Trump's trade war, intended to weaken China, has instead resulted in U.S. economic slowdown, with imports rising and domestic business decisions frozen due to the uncertainty.
"This is a self-inflicted slowdown," said Joseph Foudy, professor at NYU's Stern School of Business.
The economic clash between the two nations could signal a shift, as China positions itself to build new trade relationships and reduce reliance on the U.S. This comes as U.S. allies like Mexico and Canada strengthen their economic ties with China, potentially isolating the U.S. further.
As Trump's approval on the economy slips, the impact of his tariffs may soon be felt by American consumers, with rising prices and shortages hitting the market. Will Trump be able to shift the blame to China, or will these economic woes stick to him?
Source: Newsweek
This will be a real test of Teflon Don.
Trump Refuses to Admit 'MS-13' Tattoo Was Photoshopped in Controversial Interview
In a heated exchange during a Tuesday interview with ABC's Terry Moran, President Donald Trump adamantly insisted that a man his administration mistakenly deported to El Salvador had an "MS-13" gang tattoo on his hand.
But there's one problem: The letters "MS-13" were digitally added to a photograph, not inked on the man’s skin.
The man in question, Kilmar Abrego Garcia, had four tattoos on his fingers, including a leaf, a smiley face, a cross, and a skull. In a now-infamous social media post, Trump displayed a photo of Garcia’s tattoos, but with the added caption "MS-13" superimposed. When Moran tried to correct the record, Trump pushed back, repeatedly claiming that the "MS-13" markings were real tattoos, despite clear evidence to the contrary.
“Don’t do that,” Trump snapped at Moran, refusing to accept that the "MS-13" lettering was a digital overlay. The back-and-forth continued, with the president growing increasingly agitated, ultimately deflecting any admission of the error.
This bizarre interaction underscores the Trump administration's ongoing public relations push regarding Abrego Garcia, whose deportation has raised legal and moral questions. Although no criminal charges were ever filed against Garcia for gang affiliation, the White House has seized on the photoshopped tattoo as a way to frame him as a dangerous criminal.
White House spokesperson Kush Desai doubled down on the gang affiliation claims, though he did not address why Trump would not concede the alteration of the image. Meanwhile, experts and judges continue to question the reliability of tattoo-based gang identification, which has become a controversial method for targeting migrant deportations.
Source: The New York Times
If he’s in a gang (he’s not), so what? Most people don’t know this, but MS-13 originated in the United States. What now? Bloods and Crips get deported, too? What about the “white boy” gangs like Proud Boys and Oath Keepers?
Trump's VA Program Shutdown Leaves Thousands of Veterans Facing Foreclosure
In a shocking but unsurprising move, the Trump administration has abruptly ended a mortgage-rescue program that has saved 20,000 veterans from foreclosure, leaving many with fewer options than other homeowners.
The VA Servicing Purchase program (VASP) was created during the Biden administration to help veterans who had fallen behind on VA-backed loans by rolling missed payments into a new, affordable loan. But with mortgage rates soaring, VASP was often the only lifeline for veterans struggling to keep their homes. Now, the program has been terminated, leaving thousands at risk.
Republicans in Congress criticized VASP, arguing it was too risky for taxpayers. However, advocates warn that the program’s termination without a replacement plan could result in widespread foreclosures for veterans already facing financial hardships.
Mike Calhoun, president of the Center for Responsible Lending, emphasized the potential disaster, saying, "Tens of thousands of veterans and their families are now at significant risk of losing their homes."
Veterans like Kevin Conlon, an Iraq war veteran, have been left stranded. Despite following VA guidelines to apply for assistance, Conlon and his family are now in limbo, unsure if they’ll be able to stay in their home.
As the battle over this critical program continues in Congress, veterans and their families are caught in the crossfire, wondering if they’ll lose everything they’ve fought for.
Source: NPR
I thought Trump cared about veterans? This seems—AHEM—not too caring.
GM Slashes 2025 Profit Outlook by $5 Billion Due to Trump's Tariffs
General Motors has downgraded its 2025 profit forecast by up to $5 billion, attributing the drastic cut to the continued impact of President Trump's automotive tariffs.
The car giant now projects a profit between $8.2 billion and $10.1 billion, down from earlier expectations of $11.2 billion to $12.5 billion. Despite Trump's recent move to soften some tariffs, GM still faces a significant financial blow, with a $4 billion-$5 billion hit expected from ongoing trade policy impacts.
Trump's decision to ease some automotive tariffs, including preventing stacking duties and lowering levies on foreign car parts, is seen as a small relief. However, it doesn't fully mitigate the financial strain on automakers, especially GM, which relies heavily on both foreign-made vehicles and parts.
"We just wanted to help them enjoy this little transition, short-term," Trump said, referring to the adjustments made to the tariff structure. But GM's struggles are far from over as it continues to grapple with the effects of high tariffs on imported vehicles and parts.
The automotive sector, already under pressure from rising vehicle prices and supply chain issues, faces an uncertain future as Trump’s tariffs continue to strain the industry.
Source: The Wall Street Journal
You know what this means, right? Trump will be bailing out American automakers, but only if they’re nice to him.
Florida Moves to Ban Fluoride in Public Water, Sparking Controversy
In a bold and possibly stupid move, Florida is on the brink of becoming the second state in the U.S. to ban fluoride from its public drinking water supply, after lawmakers passed a bill that now heads to Governor Ron DeSantis for approval.
The bill, which has gained significant traction in the Republican-led state, would prevent municipal authorities from adding "water quality additives," such as fluoride, to the water. If signed by DeSantis, Florida will join Utah in rejecting water fluoridation, a practice experts say has saved millions from dental issues over the years.
Governor DeSantis has long referred to fluoridation as "forced medication," a stance echoed by state officials like Surgeon General Joseph Ladapo, who has labeled it "public health malpractice." While these claims align with certain conspiracy theories, health experts argue that fluoride is a crucial tool in preventing tooth decay with minimal risks.
The legislation passed in Florida's House as part of a broader farm bill and was approved by the Senate in April. Should the governor sign it, the law would take effect on July 1, further fueling the debate on fluoride’s role in public health.
Public water fluoridation is widely regarded as one of the most effective health innovations of the 20th century by the CDC, but the move in Florida adds to the ongoing controversy over its use in water supplies across the globe.
Source: NPR
You know, you don’t have to drink the water, right? You could go “off grid” and dig your own well and not get “forced medication.” Just sayin.’ Can we fight over some real bullshit rather than this made-up crap?