Happy 250^th America…Let’s Celebrate all year long!!

The New York Fed’s Empire State Manufacturing Index expanding…While the most recent reading from the New York Fed’s Empire State Manufacturing Index edged down, it remains in expansionary territory.

What does it mean – The Manufacturing continues to show that the economy is growing. Manufacturing jobs employment component returned to expansion and future expectations for employment jumped to a multiyear high.

Stronger than expected nonfarm payrolls (NFP) report…Labor market is starting to show signs of new life while AI creates questions for many in the software industry.

What does it mean – Despite some continued softness across data in January and recent layoffs in the AI and software space. The most recent ADP report shows that most of the hiring that took place in January was the result of small and mid-size businesses. Further proof that when government reduces regulations and gets out of the way the American entrepreneur rises to the challenge. Policy matters and the shift from the concentration in large businesses last year. Given that small and mid-sized businesses represent 46% of total employment, this represents a very healthy broadening of the economy.

Despite last week’s jobless claims that rose by 22k, the largest weekly increase since the beginning of December and largest since 2020, private payrolls came in above expectations, and the unemployment rate fell to 4.3%. Even with the negative headlines, breadth in labor gains appear to be improving.

CEO confidence rose sharply in Q1…Due to improved economic and industry outlooks and stronger capital spending plans.

What does it mean – CEOs remained cautious on hiring and reported heightened concern over AI, geopolitical risks, and tariff-driven cost pressures but are taking their marching orders from the consumer, less regulation, and more relief to come from the Big Beautiful Bill.

Homebuilder sentiment slipped to a five-month low…Affordability challenges and high construction costs continued to weigh on demand.

What does it mean – Free handouts and cash from Covid front loaded the economy pushing forward tons of spending on everything imaginable. Home prices went up faster than at any time in history. The American dream is now realizing that all that free cash from COVID that caused record inflation has now come home to roost and it is our kids that will suffer the consequences of fear mongering from DC and the media. “Too big to fail” and the “chicken littles” of the world should be avoided at all costs.

Personal income increased 0.3% month-over-month in December… Following an upwardly revised 0.4% increase (from 0.3%) in November.

What does it mean – Along with wages and salaries increasing 0.2% month-over-month in December and increasing 0.5% in November. Americans are seeing their real income rising. Unfortunately, massive inflation during the last administration saw its purchasing power drop by 21% according to the Bureau of labor statistics.

New home sales declined 1.7% month-over-month in December…This is a seasonally adjusted annual rate of 745,000 units versus 758,000 units in November.

What does it mean – On a year-over-year basis, new home sales were up 3.8%. While existing home sales decreased 8.8% month-over-month in January. Overall sales were down 4.4% on a year-over-year basis.

Cost of Health care benefits rise at fastest rate in years…Health Care is the governments “Gordion Knot”. Confused and overwhelmed, it is time for some bold and courageous leadership.

What does it mean – Under the “Un Affordable Care Act (ACA), Obama and Pelosi promised you that the ACA would lower medical cost. Since that vote in December of 2010, healthcare has only gotten more expensive. The family doctor and general practitioner are almost extinct; it has eliminated competition in the health insurance industry driving up costs. It has created massive subsidies programs for insurance companies that are now in charge of your health care, and it is all funded by the you, the taxpayer.

Prior to 1965 the US was spending about 5% of GDP on healthcare. After Medicare and Medicaid became law, it quickly doubled and now represents nearly 19% of GDP. According to Just the Facts, “from 1960 to 2024, healthcare spending in the United States increased from an average of $150/person per year to $15,516 (by 103 times) and from 5.0% of the nation’s economy (gross domestic product) to nearly 19 % (by 3.8 times).

Ronald Reagan was right, “the 9 most terrifying words in the English language are, I’m from the government and I’m here to help.”

Healthcare, inflation, and government intervention…According to Just the facts, “in 1942, the price for a maternity room at Christ Hospital in Jersey City, NJ was $7.00 per day. Adjusting for inflation, this amounts to $139.68 in 2026 dollars. In 2011, the price for a maternity room at the same hospital was $1,360 per day” and even more today.

In 1942, $7 is equivalent in purchasing power to about $139.68 today, an increase of $132.68 over 84 years. The dollar had an average inflation rate of 3.63% per year between 1942 and today, producing a cumulative price increase of 1,895.41%.

This means that today’s prices are 19.95 times as high as average prices since 1942, according to the Bureau of Labor Statistics consumer price index. A dollar today only buys 5.011% of what it could buy back then.

Just the Fact went on to say that “In a 2025 survey of 15 hospitals in Ohio (where state law requires hospitals to publish their prices) found that the daily price of a typical hospital room ranged from $1,201 to $4,187, with an average of $2,834 and a median of $2,583.” This increase is far greater than the average rate of inflation from 1942 to 2025. The one glaring difference between today and 80 years ago is government. The more it got involved the more expensive and less accountable it became.

Governments Gordion Knot. While this example highlights healthcare, the same can be said for the welfare system and trying to solve poverty. Since 1965 and Johnsons “war on poverty,” the government has spent over $25 trillion as of 2024. We can discuss the validity of “The War on poverty” and if there was any economic benefit. But what we know for certain is that the $25 trillion represents over 65% of our national debt. Currently as a nation we spent $5.3 trillion on healthcare in 2025, and the taxpayer was on the hook for over 50% or just over $2.65 trillion.

Alexander the Great saw a simple solution to a complex and impossible-to-untie knot. His example of slicing it in half with his sword provides us all with a symbol of rugged individualism, the ability to act boldly, think outside the box for a solution to a difficult, complex problem by changing the perspective.

The cry for freedom, the American taxpayer, the patient, our children, a massive and ever-growing national debt and future prosperity are begging for, is a quick decisive blow to the government created “Gordion Knot” we call national healthcare and entitlement programs run by the government.

Since the government has gotten involved, we have seen our welfare/healthcare system become the junk drawer in the kitchen. It is a catch all. It is protected by virtue signaling and one’s feelings, void of facts and desperate for more of your paycheck. If left uncheck or on its current path, the American taxpayer will see healthcare alone grow well beyond 30% of GDP, entrapping more and more people to worse health care and the largest entitlement program in modern history.

Once it was Japan, now China… Growing up in the 80’s we were warned that Japan was going to eat our lunch only to fall further behind as the US Private sector continued to innovate and create technology and solutions the consumer demanded.

Over the last 20 to 30 years, it’s been all China and if it was not for theft of intellectual property, sells of vital technology by our elected officials, and our dependency on cheap labor that built China’s economy, the free world would be a lot freer and the environment a lot cleaner.

What does it mean – As long as the USA is a constitutional republic, American exceptionalism will meet the challenges tyranny, globalism and the rest of the world will throw our way.

As the world ages, the US is in an enviable spot when it comes to its work force. US demographics are more favorable relative to China and the euro area, with stronger working-age population growth and a lower share of people in retirement. This puts the U.S. in an enviable position when it comes to competing with China and the global economy.

It’s a simple equation for success. Yet, demands discipline and courage. But most importantly, a family rooted in love.

Saturday morning, we woke up to a changed world and one facing a reality we tried to avoid since the Iran hostage crisis. While every administration since Reagan has discussed it, warned of the threat, and in one way or another, dealt with terrorism funded and backed by Iran.

Today, we take this opportunity to pray for the safety of our service men and women. For our country and our leaders. That our Lord looks after our nation and unites and strengthens us with an unwavering commitment to defend freedom and liberty here and abroad and blesses every one of us with the courage and strength to protect and share the greatness and idea of America, to face our wrongs, and build upon our legacy of rugged individualism aided by the empathy and forgiveness that has made us the most generous and giving nation this world has ever seen. That we have the wisdom and courage to unite behind our troops and recognize and deny the evil that divides our nation or cast doubts on our nation, our troops, and their mission to ensure freedom and liberty, protect the innocent, and keep our nation safe and prosperous.

John F. Kennedy once said, “let every nation know… that we shall pay any price, bear any burden, meet any hardship, support any friend, oppose any foe to assure the survival and success of liberty”.

Let’s roll America!!

Doug De Groote, CFP®, MBA, CTC
Managing Director

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