This was always going to be an eerily quiet week for data releases. Add on a noise-canceling government shutdown, and you can measure this week’s economic decibel count on one hand.
To break the silence, I’m including a few unusual indicators and a couple interesting news stories. If you didn’t see our piece on Trump’s Tariffs from yesterday, be sure to check that out.
Monday
U.S. Takes an Equity Stake in Trilogy Metals
The U.S. government now owns 10% of Trilogy Metals, a Canadian mining company. The acquisition comes with a reversal to a Biden administration decision to halt Ambler Road, a mineral exploration project in Alaska. Trilogy is the fifth company that the U.S. has taken a stake in under the Trump administration—with more to come—joining U.S. Steel, Intel, MP Materials, and Lithium American.
My knee jerk reaction is to condemn any seizing of the means of production, but I’m not familiar enough with the critical minerals situation (and competition with China) to offer any hot takes on the subject. We’ll try to dig into this and maybe put together a longer post on the subject.
TSA Checkpoint Travel Numbers
The TSA travel number website says, “Due to a lapse in federal funding, this website will not be actively managed.” Fortunately, it seems like the person who actively manages it didn’t get the memo, because they keep publishing data updates.
Travel volumes have held up remarkably well, with weekly flyers up about 2.5% year over year. This is encouraging at a time when most parts of the economy are flying blind.
Baker Hughes Rig Count
The number of active U.S. oil rigs fell, ending a streak of five consecutive weekly increases. Rig counts are still significantly lower than in early April when the Liberation Day tariffs were announced.
Gas prices were unchanged this week and remain pretty low. This continues to be a boring data series, and that’s just fine.
Diesel prices fell slightly and are up a modest $0.13/gallon year over year.
Tuesday
Cocaine Prices
Trump campaigned on tackling inflation. In at least one very specific way, he’s done just that: “Cocaine sold in the U.S. is cheaper and as pure as ever for retail buyers.” [This is a WSJ article—here’s a gift link that might work for some of you who don’t have subscriptions]
In short, two Trump administration policies have inadvertently kicked the cocaine-smuggling door wide open for an ascendant cartel:
The U.S. got Mexico to crack down on the Sinaloa Cartel’s fentanyl operations, giving an opportunity for the Jalisco New Generation cartel to rise to power.
The diversion of federal agents from drug-traffic interdiction to immigration efforts has left certain drug check points unstaffed.
As a result, cocaine use in the western U.S. is up 154% from 2019 levels, while cocaine prices are down nearly 50%.
Wednesday
Federal Budget Deficit
Keep reading with a 7-day free trial
Subscribe to Sage Economics to keep reading this post and get 7 days of free access to the full post archives.