This Week in Economics: Tariffs, SNAP Fears and Holiday Spending

Well, well, if it isn’t another Friday come upon us. And Halloween, no less. Fret not: We only have treats for you here.

Here’s what we covered at Decision Points this week:

“It was a familiar pattern for Trump,” Tim wrote. “The threat of a sharp increase in tariffs is consistent with his style of striking first publicly, then letting negotiations go on behind the scenes as he waits for the opportunity to announce a deal that he asserts only he could have made.”

As is the case with every “deal” Trump announces, we’ll have to watch whether China confirms the terms of the arrangement and then monitor implementation.

On Tuesday, I wrote about how the partial government shutdown risks affecting some of the most vulnerable Americans – those on food stamps, the Special Supplemental Nutrition Program for Women, Infants and Children (known as WIC) and those in the preschool Head Start program.

All told, we’re talking about millions of Americans who depend on federally funded and state-administered programs. Some states have scrounged up the money to keep providing those services – temporarily, anyway.

The Supplemental Nutrition Assistance Program, aka food stamps, is the country’s largest nutrition assistance program. It costs about $100 billion per year, and benefits average $187.20 per participant per month.

On Wednesday, I looked at a new Gallup survey that asked Americans how much they planned to spend on gifts this holiday season. It’s a decent stand-in for people’s views about the health of the economy.

And in this instance, the data highlighted the “K-shaped economy,” in which those at the top fare better and better over time, while those at the bottom see their situation deteriorate.

“Americans in households earning less than $50,000 expect to spend $651 on holiday gifts, down from $776 last year,” I wrote. “Americans in households earning $100,000 or more forecast they’ll spend $1,479, up from $1,403 in 2024. As for middle-income Americans, they project spending $847, down a bit from last year’s $902.”

On Thursday, I took stock of the wave of layoff announcements over the past few weeks. Tens of thousands of workers are, or will be, out of a job right as we enter the winter holiday season.

And corporations are pouring on the corporate-speak pretty thick. They’re “removing layers” or “re-grounding” or “evolving.”

Paramount, Amazon, UPS, Target, Nestlé, Procter & Gamble and GM are each parting ways with chunks of their workforces. The reasons are varied, from a slowdown in electric vehicle demand, to the rise of AI, to the pain from President Donald Trump’s tariffs.

My thoughts: “As someone pushed out of two jobs in the last five years, I can tell you that corp’ talk about flexibility or de-layering or being “nimble” just adds insult to injury. You’re cutting costs? I get that. Please don’t dress it up like a family pet for Halloween.”