OK, let's let's try and make sense of this. It
really feels like we're looking at an economic
jigsaw puzzle right now, doesn't it? It really
does. You've got pieces that just don't seem
to fit together easily. Exactly. Like consumer
confidence is down quite a bit, actually. But
then, boom, the jobs report comes in better than
anyone thought. Right. And then GDP, the big
one, it actually shrank negative territory. But
wait, there's like a Another way to slice it
that shows things are actually pretty solid the
core GDP figure Yeah, it paints a very different
picture and then you throw in the political stuff
elections heating up some Let's say unique policy
ideas floating around definitely unique. So the
real question for you know for you listening
is What on earth does all this mean for your
finances, for your planning? That's a goal today,
right? To unpack this. Exactly. We've got a couple
of key sources to help us. First, there's the
Leidenberg Market View Weekly from early May
that gives us the economic rundown, the market
reaction. And second, we're looking at the electoral
vote news from about the same time. That's going
to dive into the politics, key races, legal stuff.
Got it. So we're connecting the dots between
the economy and the political scene. That's the
plan. Trying to pull out what really matters
for you from all this noise. All right, let's
dive into the economy first. That consumer confidence
dropped down to 86 .0 in April. That was, well,
lower than expected, right? And a big fall from
March. A significant drop, yeah. And what's interesting
is the report... directly links it, or at least
suggests a strong link, to all the talk about
tariffs. Ah, so people are actually hearing this
tariff talk and thinking, uh -oh. It seems like
it. You know, worries about prices going up for
everyday stuff, maybe uncertainty about jobs,
if tariffs hit certain industries. It feels like
that policy debate is really starting to filter
down. OK, so that potential future pain is making
people nervous now. But then, that April jobs
report... 177 ,000 new jobs. That sounds pretty
good. It does on the surface. Certainly better
than the projections. Shows there's still hiring
happening, especially in the private sector.
But there's a but, isn't there? There is. You
have to remember those revisions for February
and March. They were revised down, quite a bit
actually, by about 58 ,000 jobs total. Ah, OK,
so maybe the trend isn't quite as strong as that
one April number suggests. Exactly. Still positive,
but maybe cooling off slightly. Unemployment
held steady at 4 .2%. Job openings fell a bit.
But quits actually increased, which can sometimes
signal worker confidence. It's mixed. Mixed signals
again. OK, and that brings us to GDP. First quarter,
a negative read, minus 0 .3%. That sounds like
contraction. It does, and if you just saw that
headline, you'd definitely pause. But remember
the tariffs. Right, the connection again. The
report highlights this massive, like, 41 % surge
in imports just before the end of the quarter.
Because businesses were rushing to get stuff
in before potential tariffs hit. That's the most
likely explanation, yeah. Stockpiling. And because
imports are subtracted when calculated GDP. That
huge jump dragged the whole number down, even
if other parts of the economy were okay. Precisely.
It creates a kind of distortion, which is why
looking at core GDP is really helpful here. Explain
that one again. Sure. Core GDP basically takes
out the volatile stuff, net exports, so those
imports we just talked about, government spending,
and changes in business inventories. It focuses
more on underlying private demand. And what did
that show? It showed growth of 3 % in the first
quarter. Pretty solid, actually, and consistent
with what we've seen in previous years. OK, so
that's crucial. The headline number looks bad,
maybe tariff -related bad, but the underlying
domestic economy, the core, still seems to be
expanding reasonably well. That's the takeaway
from the report, yes. The negative headline doesn't
necessarily signal fundamental weakness. Got
it. OK, what about inflation? Always a big concern.
The PCE index. Right, the Personal Consumption
Expenditures Price Index. Month over month. Both
the main number and the core number, which strips
out food and energy, were flat. So no big jump
in April itself. OK, flat is good, right? Or
not bad? Well, yes and no. The year -over -year
numbers are still up. Headline PCE is up 2 .3
% compared to last year. And core PCE is up 2
.6%. Still above the Fed's target, then. What's
driving that? It's mainly services. The report
points specifically to inflation in the services
sector. Think health care, insurance. transport
that's keeping the overall number elevated. Falling
energy prices have actually helped keep it from
being even higher. So goods prices might be moderating,
but the cost of services is still pushing inflation
along. All right. So what does all this mean
for the Federal Reserve? They've got an interest
rate decision coming up. Cut rates. Hold steady.
Given that strong -ish jobs report, even with
the revisions and core inflation still running
above their 2 % target, plus all this uncertainty
around tariffs. The general thinking is they're
unlikely to cut rates in the next meeting. Makes
sense. Play it safe for now. Probably. Yeah.
But interestingly, the markets, they're still
betting on rate cuts later this year. Maybe three
or four. Why the disconnect? If the Fed's hesitant.
I think it comes down to rising worries about
a potential recession down the road. Markets
might be looking past the immediate data and
thinking the Fed will have to cut eventually
if things slow down more significantly. OK. So
watch the Fed. but also watch the market's expectations.
What other indicators are key right now? Definitely
keep an eye on the ISM services PMI. That gives
us a read on the health of the services sector.
Which is huge, right? Like 80 % of the economy.
Exactly. That index has been trending down a
bit lately, but it's still above 50. And 50 is
the line between expansion and contraction. Correct.
So the services sector is still growing, just
maybe not as fast as it was. It's another one
to watch closely. OK. And just quickly on the
markets themselves, stocks seem to have a good
week recently, despite all this confusing data.
They did, yeah. The big US index is NASDAQ, Dow,
S &P 500. all posted pretty solid gains. Small
and mid -cap stocks did well, too, even international
markets. Huh, so investors were looking past
the negative GDP, maybe? Possibly focusing on
the core GDP, or maybe the hope of eventual rate
cuts. Fixed income, bonds, were more mixed, likely
because of that interest rate uncertainty we
talked about. So amidst all this volatility,
especially with the tariff stuff, what's the
message for someone trying to manage their investments?
The report really stresses the difficulty, maybe
the futility, of trying to time the market perfectly,
especially now. Jumping in and out based on headlines.
Yeah, it's historically very hard to get right.
The emphasis is on staying invested, assuming
you have a long term plan, and focusing on those
long term goals. They even note the S &P 500
actually recovered pretty quickly from the dip
after those initial tariff announcements back
in April. So discipline and perspective are key.
OK, quite a picture on the economy. Let's shift
gears to the political side. The electoral vote
news source gives us a lot to chew on there,
starting in Georgia, the Senate race, Governor
Kemp deciding not to run against Senator Ossoff.
That's big. It's definitely significant. And
the speculation, as the report points out, is
pretty strong that he's keeping his powder dry
for a potential White House run in 2028. Right.
But for 2026, this helps Ossoff considerably.
Oh, absolutely. The polling included in the report
showed Kemp was really the only Republican who
ran close to Ossoff, hypothetically speaking.
Like within the margin of error close? Yeah.
One poll had it Kemp 49%, Ossoff 46%, with a
3 .1 % margin of error. So very tight. Against
other potential GOP candidates, Ossoff had leads
of like six to ten points. And the report specifically
mentions Marjorie Taylor Greene. It does. It
notes that Ossoff actually polled best against
her, leading by double digits in multiple polls.
And there's that Georgia law issue, too, right?
Exactly. You can't run for two offices at once.
So if she were to run for Senate, she'd have
to give up her House seat. That's a big gamble.
OK, moving north to Maine. Senator Susan Collins
has a Democratic challenger now for the primary.
Yes, Jordan Wood. His background is interesting,
son of clergy, activist against Citizens United,
worked for Katie Porter. So he comes with a certain
progressive profile. But the big question mark
is Governor Mills. That's the wild card. Yeah.
If Governor Janet Mills decides to jump in, that
changes the whole race instantly. She's very
popular there. Right. And New Hampshire, another
Senate race, an open seat. Seems like the Democratic
side is clearing out. It looks that way. Representative
Maggie Goodlander decided not to run. which likely
leaves Representative Chris Pappas as the front
runner for the Democratic nomination. And Republican
side. The report suggests there isn't really
a heavyweight Republican candidate emerging yet,
which, you know, could make it an easier hold
for the Democrats. OK, similar stories, it seems,
in Michigan and Minnesota. Open seats, contested
Democratic primaries, but maybe not the strongest
GOP fields yet. That's the assessment, yes. In
Michigan, you've got Representative Haley Stevens
joining State Senator Mallory McMorrow. and Abdul
El -Sayed on the Democratic side. Strong contenders.
On the Republican side, former Rep Mike Rogers
is maybe the biggest name, but the overall field
is described as, well, not particularly strong.
And Minnesota. Senator Tina Smith retiring. Right.
Representative Angie Craig is running, aiming
to be the first LGBTQ senator from Minnesota.
Again, the report characterizes the potential
Republican opponents as underwhelming. Even in
Kentucky, Senator McConnell's seat, it's expected
to stay Republican, right? Even with a primary
challenge now. Yeah, Representative Andy Barr
is challenging the former AG Daniel Cameron in
the primary. But given Kentucky's leanings, the
odds heavily favor the GOP holding that seat,
regardless of who wins the primary. OK, let's
look at a couple of house races mentioned. Maine's
second district, Jared Golden, facing former
governor Paula Page. That sounds contentious.
Oh, definitely. But Page has a very distinct,
controversial style, and he's trying for a comeback
after moving to Florida for a bit. It'll be a
closely watched race, testing how much his Trump
-aligned approach resonates now. And then in
Arizona, AZ -05, an open seat, a former NFL kicker
is running Jay Feely. Yep, Jay Feely running
as a Republican, very pro -tariff, tough on the
border platform. The report kind of questions
this trend of athletes in politics. It does.
It mentions Tuberville's success, but also others
who haven't made the leap successfully. It's
an interesting phenomena. And Feely's tariff
stance connects right back to our economic discussion.
True. And one more House note, AOC deciding not
to run for oversight chair. Yeah, Representative
Alexandria Ocasio -Cortez. The speculation is
this might free her up or signal she's maybe
thinking about higher office down the line, like
Senate. Interesting. Okay, now for some of those
unconventional policy ideas attributed to former
President Trump, the 100 % tariff on foreign
films. Yeah, that one's quite something. The
report does a good job breaking down why it's
probably completely impractical. Well, think
about modern movie making. It's global funding,
actors, crew, shooting locations. They use Titanic
as an example. How do you even decide if a film
is foreign enough for 100 % tariff? It's a logistical
nightmare. And the justification was national
security for movies. That's what was reported.
Yes, which seems tenuous at best. It's hard to
see the connection. Right. And then reopening
Alcatraz. Another head scratcher. As the report
points out, Alcatraz was shut down decades ago
precisely because it was falling apart and cost
too much to maintain. So reopening it would be
astronomically expensive, presumably. You'd think
so. The report kind of wryly speculates maybe
the idea came from watching escape from Alcatraz.
Wow. OK. And, oh, the Star Wars day post detail.
Ah, yes, the red lights they were in the Instagram
post. Yeah. For Star Wars fans, that's the color
associated with the Sith, the villains. So it
definitely got people talking about the symbolism,
intended or otherwise. Oh, always layers of meaning
there. OK, finally, let's touch on the legal
news cover. A big ruling against a Trump administration
executive order. A very significant one, yes.
Judge Barrel Howell struck down an EO that seemed
targeted at the law firm Perkins Coy. Why target
it? The judge's ruling was pretty scathing. She
basically said the order looked like retaliation
because the firm represented opponents like Hillary
Clinton, filed lawsuits challenging the administration
and supported things like DEI initiatives. And
she called it unconstitutional. Yes. violating
the first, fifth, and sixth amendments. Yeah.
She really emphasized how vital independent lawyers
are. Lawyers willing to challenge the government
without fear of punishment. A strong defense
of that legal principle. Absolutely. She drew
a contrast between Perkins Coy and other firms
she suggested had maybe bowed to pressure. And
there was also a final resolution in a North
Carolina Supreme Court election challenge. That's
right. A judge ruled against Jefferson Griffin's
challenge, confirming Allison Riggs's victory.
The key point there was upholding voters' rights,
rejecting the idea that minor administrative
errors should disqualify otherwise valid votes.
It affirmed due process for voters. Okay, so
wrapping this all up. It's clear we're in a period
with a lot of tension, a lot of conflicting signals.
Definitely. You've got this weird disconnect
in the economy. Nervous consumers, but okay,
job growth, headline GDP down, but core GDP up,
tariff uncertainty looming over everything. And
politically, it's just as dynamic. Key elections
taking shape, unusual policy debates, and these
really fundamental legal challenges about democratic
processes. It really makes you wonder, doesn't
it? How do all these threads, the economy, the
tariffs, the politics, the legal battles, how
are they all going to weave together? Yeah, what's
the ultimate impact going to be? For you listening,
how might this mix of cautious consumers, active
job markets, potential trade wars, and fights
over the rules of the game? How does that shape
your future, your opportunities, the challenges
you might face? It's a complex picture, no doubt.
There's no single easy answer. It really forces
you to think about which of these developments
deserves more of your attention, right? Where
should you focus your energy to stay informed?
Absolutely. Is it the week -to -week economic
numbers, the long game of these Senate races,
the precedent set by these court rulings? Lots
to consider as we navigate, well, these very
interesting times.