After peaking in March, the total trading activity (exports + imports) has declined to the point where year over year it has only increased by 0.68 percent in nominal terms, which, adjusted for inflation, no matter the measure means that real trading economic activity has declined over the last year.
ISM Services
July 2025: ISM’s Service Price Index Reached Its Highest Level Since October 2022. According to the Institute for Supply Management, “The Prices Index registered 69.9 percent in July, a 2.4-percentage point increase from June’s reading of 67.5 percent. The index has exceeded 60 percent for eight straight months, with July’s reading the highest since October 2022 (70.7 percent).” [Institute for Supply Management, 2025-08-05]
Trump’s Top Economic Advisor Admitted Trump “Wants His Own People” In Charge Of Producing Statistcs. According to the Washington Post, “McEntarfer raised questions about the future independence of agencies tasked with reporting critical economic data — and threatened to further politicize the fraught debate over whether federal budget cuts and job eliminations have weakened the nation’s ability to track major economic statistics. The White House on Sunday dispatched Kevin Hassett, its top economic adviser, to publicly defend the president’s decision to fire McEntarfer, but he did not provide evidence to support Trump’s claims that recent monthly job figures, which were revised downward last week, were rigged to make him look bad. ‘The president wants his own people there, so that when we see the numbers, they”re more transparent and more reliable,’ Hassett said on NBC’s ‘Meet the Press.’” [Washington Post, 2025-08-03]
Strained Budgets
Q2 2025: While Global Snack Sales Rose, Sales In The U.S. Fell As Americans Felt Budgetary Pressure. According to the Wall Street Journal, “Americans are back on the hunt for a good deal. Consumer spending stagnated in the first half of this year, according to federal data issued last week, and the CEOs of Chipotle Mexican Grill, Kroger and Procter & Gamble, among others, are telling investors that their customers are more strapped—or appear to feel that way. ‘There’s a lot of consumer anxiety,’ said Dirk Van de Put, chief executive of Mondelez International, which makes Oreo cookies, Ritz crackers and Cadbury chocolate. Global sales of snacks rose last quarter, but U.S. sales fell a lot.” [Wall Street Journal, 2025-08-03]
Higher Prices
Fearing Tariff-Driven Higher Prices, American Households Started Back-To-School Shopping The Earliest In Recorded Data. According to Bloomberg, “Back-to-school shopping season kicked off early this year. More than two-thirds of Americans started prepping for the school year in early July, the highest share since the National Retail Federation started tracking this back in 2018. ‘Consumers are being mindful of the potential impacts of tariffs and inflation on back-to-school items,’ says Katherine Cullen, a vice president at the trade association. Shoppers” attempts to get ahead of President Donald Trump’s tariffs may prove to be futile. Inflation, as measured by the consumer price index, rose 0.3% in June, the highest monthly reading since January, with companies passing through the cost of the duties starting to show up in household furnishings and other goods. Many economists and analysts expect higher customs duties to meaningfully show up in data for July and August, as retailers finally exhaust their pre-tariff inventories.” [Bloomberg, 2025-08-04]
Q2 2025: AI Capital Expenditures Contributed More To GDP Growth Than Consumer Spending, As More Money Was Spent On AI Infrastructure As A Percent Of GDP Than Telecom Infrastructure During The Dot Com Bubble. According to the Wall Street Journal, “Investor and tech pundit Paul Kedrosky says that, as a percentage of gross domestic product, spending on AI infrastructure has already exceeded spending on telecom and internet infrastructure from the dot-com boom—and it’s still growing. He also argues that one explanation for the U.S. economy’s ongoing strength, despite tariffs, is that spending on IT infrastructure is so big that it’s acting as a sort of private-sector stimulus program. Capex spending for AI contributed more to growth in the U.S. economy in the past two quarters than all of consumer spending, says Neil Dutta, head of economic research at Renaissance Macro Research, citing data from the Bureau of Economic Analysis.” [the Wall Street Journal, 2025-08-01]
Massive Increases In Spending Have Thwarted Free Cash Flow Growth At Hyperscalers. According to the Wall Street Journal, [the Wall Street Journal, 2025-08-02]
Upward Redistribution
July 2025: Trump Endorsed Eliminating Capital Gains On Housing, Not Just The First Quarter Million Dollars. According to Yahoo Finance, “Typically, when you sell an asset for more than you paid, the profit is considered a capital gain — and subject to tax. With U.S. home prices having soared over the years, many homeowners looking to sell now find themselves in position to pay capital gains tax. But President Donald Trump is floating a plan to eliminate this tax specifically on home sales. At a White House Q&A on July 22, a reporter asked Trump for his view on scrapping the tax to help ‘unleash’ the housing market. ‘We”re thinking about that,’ Trump replied. ‘But [we] would also unleash it just by lowering the interest rates. If the Fed would lower the rates, we wouldn’t even have to do that. But we are thinking about no tax on capital gains on houses.’ Currently, if you’ve owned your primary home for at least two years and sell it with a capital gain, the IRS allows you to exclude up to $250,000 ($500,000 for joint filers) of the taxable gain. But that exclusion was set back in 1997 — when home prices were substantially lower. Trump’s comment followed U.S. Rep. Marjorie Taylor Greene’s recent introduction of the ‘No Tax on Home Sales Act,’ a bill that would eliminate federal capital gains taxes on the sale of primary residences altogether. ‘Thank you, President Trump, for supporting my No Tax on Home Sales Act!’ Greene posted on X after his remarks. ‘You worked for it. You should keep it. Let’s get this bill passed!’” [Yahoo Finance, 2025-07-30]
Health Care Cuts
Wall Street Has Rewarded Insurers That Cut Benefits And Exited Markets For Medicare Advantage. According to the Wall Street Journal, “Many seniors enjoy the perks that come with Medicare Advantage. But those extras—like dental coverage and free gym memberships—are being scaled back. Insurers are cutting benefits and exiting from unprofitable markets, and Wall Street is cheering them on. Once rewarded by investors for rapid expansion in the lucrative privatized Medicare program, companies are now being applauded for showing restraint amid rising medical costs and lower government payments. Humana and CVS Health, which operates Aetna, both beat earnings expectations in their most recent quarterly updates and saw their shares rise, bucking a broader downturn in health-insurance stocks. Notably, both moved to retrench their Medicare Advantage businesses this year, with Humana projecting a loss of as many as 500,000 members from its plans sold directly to seniors. In contrast, industry giant UnitedHealth Group grew more aggressively in Medicare this year—but that growth came with soaring costs and disappointing results. Its stock has lost nearly half its value, and the company is now planning a major pullback of its own for 2026. The upshot: Insurers are learning the hard way that restoring profitability means accepting lower growth or shrinkage in their Medicare Advantage rolls. And the pullback isn’t limited to Medicare. Similar retreats are under way in Medicaid and the Affordable Care Act (ACA) exchanges.” [Wall Street Journal, 2025-08-05]
Corruption
Trump’s Oldest Sons Backed A SPAC Merger That Could Target Crypto, Supported By An Investment Bank They Are On The Board Of. According to the Financial Times, “Eric Trump and Donald Trump Jr are backing a new blank cheque investment vehicle targeting US manufacturers and looking to benefit from government spending. The launch of New America Acquisition I Corp marks the latest Trump family foray into public markets. The vehicle will seek to buy a US company that plays ‘a meaningful role in revitalising domestic manufacturing, expanding innovation ecosystems, and strengthening critical supply chains’, the group said on Monday. The vehicle’s Securities and Exchange Commission filing said it would target a company ‘well-positioned to benefit from federal or state-level incentives, such as grants, tax credits, government contracts or preferential procurement programs’ and where ‘the US government has an identifiable economic or security interest’. A person close to the Spac, which aims to raise $300mn in an offering on the New York Stock Exchange, did not rule out a merger with a crypto group, however. The target company ‘could be in crypto . . . but it’s more likely to be something in data centres, drones, something bricks and mortar. An investment in a great American company’, the person said. Trump Jr and Eric Trump own 2mn and 3mn founder shares in New America respectively, and have taken positions on the board of the Florida-incorporated vehicle’s advisory board, filings show. […] New America’s offering will be underwritten by two firms: Dominari Securities, which is headquartered in Trump Tower and counts Eric Trump and Trump Jr on its advisory board, and D Boral Capital, a New York-based boutique investment bank that helped list the president’s media company Trump Media & Technology Group via a Spac in 2022. Dominari’s chief executive Kyle Wool is also a member of New America’s advisory board. The Financial Times reported in April that shares in Dominari Holdings, which owns Dominari Securities, rose by 580 per cent in the six weeks before its February 11 filing revealing that the president’s sons had joined its advisory board.” [Financial Times, 2025-08-04]
[Bloomberg, 
[Bloomberg, 
[the Wall Street Journal,