K-Shaped Catastrophe: US Economy Continues To Collapse, January Job Losses Worst Since 2009, Seldom New Jobs Added, Consumers Fall Deeper Into Debt, As Trump Says 'I'm Very Proud Of It'
Worse yet, there is a growing trend of “reverse recruiting,” with candidates paying recruiters to pair them with a job.
The United States economy continues its downward spiral with the latest jobs report highlighting that the labor market is in a precarious position.
The WinePress detailed just some of the economic woes last year, along with the Trump administration withholding some key data due to the government shutdowns delaying the reports.
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Last week, it was revealed the the country had the most January job losses since 2009, during the Great Recession, and had the lowest hiring for the month on record.
According to the Challenger, Gray & Christmas report:
U.S.-based employers announced 108,435 job cuts in January, an increase of 118% from the 49,795 cuts announced in the same month last year. It is up 205% from the 35,553 job cuts announced in December, according to a report released Thursday from global outplacement and executive coaching firm Challenger, Gray & Christmas.
January’s total is the highest for the month since 2009, when 241,749 job cuts were announced. It is the highest monthly total since October 2025, when 153,074 cuts were recorded.
“Generally, we see a high number of job cuts in the first quarter, but this is a high total for January. It means most of these plans were set at the end of 2025, signaling employers are less-than-optimistic about the outlook for 2026,” said Andy Challenger, workplace expert and chief revenue officer for Challenger, Gray & Christmas.
As the report alluded to, the U.S. is creating few new jobs.
On top of this, consumer credit is growing.
Bloomberg reported:
US consumer borrowing increased in December by the most in a year, reflecting a pickup in both revolving and non-revolving credit.
Total credit outstanding rose $24 billion following a $4.7 billion gain in the prior month, Federal Reserve data showed Friday. The reading topped all estimates in a Bloomberg survey of economists.
Non-revolving credit, such as loans for vehicle purchases and school tuition, increased $10.2 billion in December, the most in seven months. Meantime, credit-card and other revolving debt outstanding jumped $13.8 billion, the biggest monthly gain in over two years. The report doesn’t include mortgages.
More recent data have raised concerns about US household balance sheets, which had previously been seen as relatively healthy. Last month, a report from the Federal Reserve Bank of New York showed consumers saw their probability of missing a minimum debt payment over the next three months at its highest since April 2020.
Separate data has also showed that US income growth is lagging behind consumer spending, raising concerns about the sustainability of household demand.
Naturally, as personal debt continues to rise and job losses mount, Americans are cutting back on spending out of necessity and/or because many things are simply too expensive.
Auto sales continue to disappoint, even as the media tries to blame it on the weather.
MarketWatch: “Sales of new cars and trucks — a barometer for the economy — sank in January to the lowest level in three years. It could be a tough year for automobile makers even after the weather gets warmer.”
Vehicles in the U.S., both new and used, are simply unattainable for most Americans.
Housing, as we know, is also a mess; and new reports reveal that a growing number of Americans are underwater on their loans — roughly 1.1 million homeowners are insolvent on their mortgage, representing a 7-year high. This is up close to 60% from 696,000 at the start of 2025, marking a large jump in just one year.
Also, it was revealed that U.S. retail sales for December — the Christmas season — fell well below expectations.
CNBC:
Retail sales were flat on the month following a 0.6% increase in November, according to numbers adjusted for seasonality but not inflation. Economists surveyed by Dow Jones had expected an increase of 0.4%. Excluding autos, sales also were unchanged, against the estimate for a 0.3% increase.
On an annual basis, sales rose 2.4%, a considerable step down from the 3.3% pace in November. Sales ex-autos were up 3.3% annually in December. A measure known as the “control group” of sales that excludes a number of items and feeds directly into gross domestic product calculations showed a 0.1% drop for the month.
The report puts a downbeat end to an otherwise solid year for shopping activity, with higher-end consumers spending briskly through much of 2025, though those on the lower end of the income spectrum were more cautious.
The shopping pace failed to keep up with inflation, as the consumer price index for December posted a 2.7% increase.
For December, multiple categories posted losses while only a few showed notable gains.
Miscellaneous retailers and furniture stores posted declines of 0.9%, while clothing and accessories stores were off 0.7%, and electronics and appliances saw a drop of 0.4%. Online outlets sales rose just 0.1%, while building materials and garden centers saw the strongest gain, up 1.2%.
“This is a K-shaped economy with strong spending from the top and much more cautious spending from middle- and lower-income consumers,” said Heather Long, chief economist at Navy Federal Credit Union. “Retail sales were flat in December, driven by soft spending on autos, home furnishings, appliances and clothing. These items were hard hit by tariffs in 2025 and consumers shifted their spending elsewhere.”
Indeed, the U.S. economy has never been more “K-Shaped” than ever; the rich getting richer and the poor getting poorer, with an erosion of the middle class.
In late-November, analysts at RealInvestmentAdvice.com said that a K-shaped economy describes a post-crisis recovery where different parts of the economy and society are performing at sharply diverging rates, forming the two arms of the letter “K.”:
The upper arm (going up): Sectors, companies, assets, and people that benefit from the recovery and, in many cases, are wealthier than before the pandemic. This includes investors in technology stocks, big tech companies, the luxury sectors, high-income professionals, and asset owners.
The lower arm (going down): Sectors, small businesses, and people that continue to decline or stagnate even as the overall economy appears to improve. Examples include: the hospitality and travel industries, many lower-priced retail outlets, low-wage service workers, small businesses, and many middle-class and lower-income households.
The graph below showing the stark divergence between the S&P 500 and the University of Michigan consumer survey best depicts the K shaped economy. You can make similar K shaped plots comparing stock markets, GDP, and megacap corporate profits versus small business closures, wage growth for low-income workers, and economic activity in the manufacturing sector.
But President Donald Trump says the economy is doing wonderfully.
In an interview with “NBC Nightly News” anchor Tom Llamas that aired during the Super Bowl, Trump said the U.S. is experiencing the Trump economy.
“At what point are we in the Trump economy?” Llamas asked.
“I’d say we’re there now,” he replied. “I’m very proud of it.”
“I think ’26 is even gonna be better. You know, we have hundreds of billions of dollars pouring into our country. Actually trillions — $18 trillion is being invested in our country as we speak. And there are factories and plants and thousands of businesses being built all over the country.”
AUTHOR COMMENTARY
Trump is of course lying, he has to keep telling everyone how great things are; but in a roundabout way, he is telling the truth because for his and 1 & 2% buddies, the central banks, BlackRock, etc., things couldn’t be better and they are all loving it. They want job losses, they want inflation, they want this massive disparity; Fed Governors have been calling for a culling in the labor market for years before Trump 2.0.
If you recall, during the 2020 election campaign Trump touted a V-shaped recovery and Biden a K-shaped recovery. Both were telling the truth and lying.
Trump showed his hand again that he only cared for the ‘elite’ class by touting a V-shaped recovery because the markets rubber-banded so fast because of 0% interest and absurd capital injections to juice the market, with BlackRock helping to facilitate the debt buying, along with all the “stimulus” that was created; while more billionaires and multi-millionaires were created in that one year alone than at any point in history.
Biden, on the other hand, pointed towards a K-Shaped economy that pointed out the issues discussed in this report. But what did he and the Dems do about it? Made the problem worse, protected and helped enrich the billionaire class, gaslit us (along with Janet Yellen and Jerome Powell) with “transitory inflation,” the Inflation Reduction Act that printed more money (which is inflationary — DUH!), the stock market continued to hit all-time record highs under his administration, and the wealth gap grew.
Now the markets are back to hitting all-time record highs just as last week and the wealth gap continues to widen and widen; as it has been dreamt-up and designed by central planners for many, many years, to have extreme-haves and extreme-have-nots; to be the buyers and lenders of last resort. Though, eventually, all of it will come crashing down.
Proverbs 22:7 The rich ruleth over the poor, and the borrower is servant to the lender. [16] He that oppresseth the poor to increase his riches, and he that giveth to the rich, shall surely come to want.
A few weeks ago, Trump lauded a weaker dollar. “I think it’s great,” he said after an Iowa economic speech “The value of the dollar — look at the business we’re doing.”
Quartz published a good article about Trump’s weak dollar policy — something that I have articulated for a while; so yes, this economic disaster is what Trump and his crew want.
The paper noted:
It’s certainly good news for U.S. exporters, who find it easier to sell their products to foreign customers who have more purchasing power. Tech behemoths like Apple, which generate most of their revenue abroad and later convert it to dollars, are also surely warm to the trend.
The dollar has shed more than 10% of its value since Trump re-entered the Oval Office, according to the U.S. Dollar Index, which tracks the performance of the dollar against a basket of currencies.
In November, the Federal Reserve Bank of St. Louis said the weakening dollar was “consistent with the current federal administration’s stated preferences.” On that front, there have been mixed signals.
The financial and political worlds devoted much attention to a 41-page blueprint authored in late 2024 by Stephen Miran, a Trump economic adviser now serving in a temporary capacity as a Federal Reserve governor. He argued that a strong dollar made U.S. exports too expensive for foreign customers, and that Trump could attempt to compel other countries to strengthen the value of their currencies.
A lever to force that change? Tariffs and trade wars.
The White House has distanced itself from that document. Still, it’s difficult to set aside Trump’s interest in a weaker dollar. He spoke in favor of it early in his first term.
“The [administration] has adopted a weak dollar policy even if they state otherwise,” Brusuelas said. “A weaker dollar is collateral damage caused by policy unpredictability.”
Indeed, a feebler dollar does help Trump achieve his longstanding goal of eliminating the trade deficit, which he views as evidence that the U.S. is getting ripped off. The trade deficit has shrunk, but many economists maintain such a gap isn’t a sign of economic weakness.
This is what I have been warning about. It’s great for the corporations, but for us the people it siphons us dry.
As I said last year in September, the jobs market has been fake for years. People who live in the real economy know that the jobs market has been fraudulent for years. Go online and there are tons of stories about ghost jobs - employers and businesses putting out fake listings for jobs that do not exist. This has become very common.
That problem is only getting worse as more reports reveal that ghost listings are more prevalent than ever.
Worse yet, there is a growing trend of “reverse recruiting.” The Wall Street Journal reported:
Landing a white-collar job is getting so tough that candidates—not companies—are paying recruiters to match them with positions.
Through good economic times and bad, recruiters have usually operated the other way around: Companies pay them to find talent for tough-to-fill positions. Now, though, job seekers are hiring a new crop of what are called reverse recruiters to help them crack a competitive market.
Reverse-recruiter models vary, but many require job seekers to pay them part of their salary once they accept a job. Others charge a set rate to submit applications on a candidate’s behalf. Such services typically go beyond career coaching or résumé reviews, and sometimes involve the recruiter applying on behalf of the candidate.
It’s falling apart all by design.
All of this will get worse with AI replacing jobs and the administration now backtracking on mass-deportations.
Indeed, the economy is “booming,” the sound of the roof caving in; and the 1 and 2% are ‘winning' like they’ve never won before.
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On one of his missionary journeys, the apostle Paul visited Athens, Greece, where he said he witnessed “the city wholly given to idolatry,” and who were “too superstitious” and worshipped a plurality of gods and deities, though the people acknowledged that there was still one God above all that was a mystery to them. When questioned by the philosophers …
[7] Who goeth a warfare any time at his own charges? who planteth a vineyard, and eateth not of the fruit thereof? or who feedeth a flock, and eateth not of the milk of the flock? [8] Say I these things as a man? or saith not the law the same also? [9] For it is written in the law of Moses, Thou shalt not muzzle the mouth of the ox that treadeth out the corn. Doth God take care for oxen? [10] Or saith he it altogether for our sakes? For our sakes, no doubt, this is written: that he that ploweth should plow in hope; and that he that thresheth in hope should be partaker of his hope. (1 Corinthians 9:7-10).
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I don't think that gov.co ever announced that we were in a recession. Just as well - we're far past that now.
Fine article, and excellent summary of our plight!
Trump's sycophants don't care. Newsmax and Fox News constantly reassure them that thanks to our president the economy is the best it's been in forty years. I kid you not. My parents watch Newsmax every evening and I often eat dinner with them.