Brian Dake

Consumer spending fell sharply in January, the Commerce Department reported Thursday. Advance retail sales declined 0.8% for the month following a downwardly revised 0.4% gain in December.

Sales at building materials and garden stores were especially weak, sliding 4.1%. Miscellaneous store sales fell 3% and motor vehicle parts and retailers saw a 1.7% decrease. Gas station sales also declined 1.7% as prices at the pump dropped during the month. On the upside, restaurants and bars reported an increase of 0.7%.

Consumer strength has been at the center of a U.S. growth picture that has proven far more durable than most policymakers and economists had expected. Spending accelerated by 2.8% in the fourth quarter of 2023, finishing out a year in which gross domestic product rose 2.5% despite widespread predictions for a recession.

However, worries linger that stubbornly high inflation could take its toll and jeopardize prospects going forward.

“It’s a weak report, but not a fundamental shift in consumer spending,” said Robert Frick, corporate economist for Navy Federal Credit Union. “December was high due to holiday shopping, and January saw drops in those spending categories, plus frigid weather plus an unfavorable seasonal adjustment. Consumer spending likely won’t be great this year, but with real wage gains and increasing employment it should be plenty to help keep the economy expanding.”

Republicans in the Wisconsin Senate and Assembly have passed new legislative district lines that are identical to those drawn by Democratic Gov. Tony Evers in their latest attempt to enact new maps before the Wisconsin Supreme Court’s liberal majority does it for them.

Senate Majority Leader Devin LeMahieu, R-Oostburg, introduced Evers’ maps as an amendment to a bill shortly after session began Tuesday. A memo from the Wisconsin Legislative Reference Bureau confirmed that maps voted on Tuesday are identical to what Evers submitted to the state Supreme Court as part of an ongoing redistricting lawsuit.

LeMahieu said Republicans decided to support the governor’s maps because “the writing was on the wall” in the Supreme Court redistricting case, arguing the court’s liberal majority hadn’t taken GOP arguments in the case seriously.

“Given the circumstance, the Legislature is faced with two choices,” LeMahieu said. “Either pass the governor’s maps as is or allow the liberal majority of the Wisconsin Supreme Court to gerrymander the state at the very last minute without public input.”

Evers vetoed a previous version of his maps that were passed by the Legislature with changes to protect a handful of GOP incumbents. But the governor indicated during an interview with WISN-TV that if Republicans passed his maps unchanged, he would support them.

“If my maps are approved by the Legislature, of course I’d sign them,” Evers said.

Like other maps submitted to the Wisconsin Supreme Court, Evers’ plan would improve Democrats’ chances in future races for the Legislature — where right now, Republicans hold a 64-35 majority in the Assembly and a 22-10 majority in the Senate. Most of the maps submitted to the court would still give Republicans a slight edge but would likely move the Legislature closer to 50-50.

The Labor Department said Tuesday that the consumer price index, a broad measure of the price of everyday goods including gasoline, groceries and rent, rose 0.3% in January from the previous month. Prices climbed 3.1% from the same time last year.

Other parts of the report indicated that inflation has been slow to retreat. Core prices, which exclude the more volatile measurements of food and energy, climbed 0.4% – the largest monthly increase since April 2023. It rose 3.9% annually.

Housing costs were the biggest driver of inflation last month. Rent costs rose 0.6% for the month and are up 6.1% from the same time last year.  Food prices rose 0.4% over the course of the month. Grocery costs also rose 0.4% last month and are up 1.2% compared with the same time last year.

The price of both health insurance and auto insurance also jumped in January, rising 1.4% over the course of the month.

The Federal Reserve has signaled it is closely watching the report for evidence inflation is continuing to subside as policymakers try to determine what comes next for interest rates in 2024.

Central bank officials have opened the door to cutting interest rates this year, but they have pushed back against the market’s aggressive expectations. Chair Jerome Powell said during the Fed’s most recent meeting that a March rate cut is likely off the table as policymakers do not have enough confidence that inflation is on the path back to 2%.

In a statement released on Saturday Congressman Mike Gallagher says he is not running for re-election.

In the release, he said, “…. And so, with a heavy heart, I have decided not to run for re-election”. Since 2017, Congressman Mike Gallagher has been the representative of Wisconsin’s 8th District in the U.S. House of Representatives. In the release, he says thanks to those in Northeast Wisconsin for the “honor of a lifetime”.

Gallagher says that when he first ran for Congress eight years ago, he promised to treat his time in office as a high-intensity deployment. Gallagher served for seven years on active duty in the United States Marine Corps. This includes two deployments to Iraq. He also served as the lead Republican staffer for the Middle East and Counterterrorism on the Senate Foreign Relations Committee.

Gallagher’s decision leaves the race for the 8th Congressional seat wide open in a district that’s considered to lean Republican and where Gallagher won with more than 62% of the vote in every general election since 2016.

“I wouldn’t rule out running for something in the future. Public service is always going to be part of my DNA.”

Roger Roth, a former State Senator from Appleton, has announced that he will be running for Gallagher’s seat, in a post on X (Formerly Twitter).

Over the last few months, the National Retail Federal (NRF) became the focus of various flawed narratives alleging the retail industry distorts retail theft data to drive public policy goals. NRF made a correction to an April 2023 report on organized retail crime (ORC), withdrawing a phrase that suggested ORC accounted for half of the overall inventory losses suffered by the retail industry in 2021.

It is a known fact that retailers are facing an increase in theft, crime and violence, much of it involving organized retail crime efforts to resell stolen merchandise back to consumers.

Quantifying the scope of ORC is a known challenge, as ORC is not a single event or act. ORC networks use shoplifting, break-ins, cargo theft and other criminal activities to obtain stolen goods to fund their enterprises.

Retailers large and small have differing resources and capabilities dedicated to investigating, tracking and analyzing events that may be tied to organized retail crime groups.

Retailers admit to underreporting shoplifting due to lack of police response, failure to arrest or prosecute, or when a retailer recovers the merchandise from the shoplifter.

Police department reporting of retail theft is also wildly inconsistent. Some departments may report it as shoplifting. Others may categorize these crimes as larceny, robbery or property crimes. And furthermore, some departments won’t even respond to shoplifting due to current procedures or response capabilities. At the time of an incident, a retailer or law enforcement agency may not know the theft is part of an organized retail crime effort until an investigation takes place. Law enforcement nationwide is short-staffed and under-resourced, and needs support from the federal government for these major cross-jurisdictional crimes.

A recently released study by the Council of Criminal Justice on shoplifting provided data from the perspective of law enforcement reporting. Within their report, the CCJ highlights similar limitations of data, including a statement that the data used within their report “almost uncertainly undercount total shoplifting.” Of course, certain media outlets even discounted this fact by publishing misleading narratives that retail theft is not a serious issue.

It’s fair to ask questions about the data and the true impact of these thefts and organized groups, but the problem with media coverage that focuses on the known data problems gives many critics an unwarranted excuse to downplay the seriousness of these crimes and delay efforts to address them.

Evidence is everywhere that retail crime is on the rise. Media outlets across the nation continue to report ongoing acts of widespread shoplifting. Law enforcement agencies continue to establish task forces and alliances focusing on organized retail crime. These same agencies are reporting apprehensions of repeat theft offenders and fencing operations involved in stealing and reselling stolen goods. Retailers continue to lock up more merchandise to deter and prevent theft, much to the dismay of legitimate customers who now have to wait for a store associate to unlock commonly stolen items.

Better data is absolutely part of the solution, but we should not delay acting on the obvious evidence of retail theft in our communities every day while arguing over the numbers.

It’s time for critics to stop dwelling on flawed, flashy inferences and focus on the facts. Instead, let’s prioritize addressing the flagrant disregard of law that threatens all retailers and weakens our communities.

A federal appeals court will hear oral arguments Thursday in a case that has a Canadian energy firm and a Lake Superior tribe fighting over the fate of an oil and gas pipeline running across northern Wisconsin.

The 70-year-old Line 5 operated by Enbridge, Inc. can carry up to 23 million gallons per day of light crude oil and natural gas liquids from Superior across northern Wisconsin and Michigan to Sarnia, Ontario.

Last year, a federal judge ordered Enbridge to pay $5.1 million for trespassing on lands owned by the Bad River Band of Lake Superior Chippewa. U.S. District Court Judge William Conley ruled the company must remove its Line 5 pipeline from those lands within three years.

The Bad River tribe wants the federal appeals court to order Enbridge to turn over profits from the continued operation of Line 5 and immediately stop trespassing on tribal lands.

Enbridge argues the company isn’t trespassing on lands with expired easements because the tribe signed a 1992 agreement that the pipeline would continue to operate until 2043 in exchange for $800,000.

Wisconsin Manufacturers & Commerce was joined by 32 other associations, including WIB, from across the state on Tuesday urging lawmakers to tackle ever-increasing medical costs in the worker’s compensation system.

“Wisconsin has among the highest medical costs for worker’s compensation in the nation…35% higher than the national median,” the letter reads. “The average cost per workers compensation claim in Wisconsin is $10,000 higher for health care cost than the average state.”

Forty-five other states have reined in costs by implementing a medical fee schedule. Wisconsin’s costs for professional health services outpace other midwestern states, including Michigan, Minnesota and Illinois, by more than double.

“The Worker’s Compensation Employers Coalition is in support of the adopting the WCAC fee schedule because it is a tested reform that almost every other state effectively uses to keep medical costs in check,” the letter continues. “Please support Wisconsin employers and bring worker’s compensation medical costs under control.”

Click here to read the full letter.

The Wisconsin lawmakers who’ve been studying artificial intelligence for the past six months are recommending five new laws in their recently released final report. The Speaker’s Task Force on Artificial Intelligence Chairman Rep. Nate Gustafson, R-Fox Crossing, said while AI has tremendous potential, there are also some real worries that come with new technology.

“We stand at the forefront of technological advancement and it is vital that we address the challenges and opportunities presented by AI,” Gustafson said. “This report represents an opportunity to ensure that Wisconsin remains a leader in responsible AI development, benefiting all sectors of our society.”

The report suggests three new laws that deal with “generative AI,” which can create new images, videos, and sounds.  Gustafson says lawmakers must create a new law to deal with AI-generated porn. “Specifically, this legislation prohibits conduct related to the possession of obscene material that contains a depiction of a purported child engaging in sexually explicit conduct,” the report states. There is also a suggestion for a law against AI generated revenge porn.

The task force is also recommending a new law to make sure AI is kept out of political commercials in Wisconsin.

Federal Reserve Chair Jerome Powell said “the U.S. is on an unsustainable fiscal path” in a “60 Minutes” interview with Scott Pelley released Sunday.

“The U.S. federal government’s on an unsustainable fiscal path. And that just means that the debt is growing faster than the economy. So, it is unsustainable. I don’t think that’s at all controversial,” Powell said when asked if the national debt is a danger to the economy.

The U.S. national debt topped $34 trillion for the first time ever in early January, just over three months after surpassing the $33 trillion mark, according to data released by the U.S. Treasury.

Congress has punted on spending deadlines three times since the end of September as it grapples with how to fund the government amid tensions about the ballooning national debt.

Under the latest stopgap measure passed in January, funding for four federal agencies will expire on March 1. Funding for the rest of the government is set to run out on March 8.

President Biden and House Republicans faced off on the borrowing limit last spring, ultimately averting disaster days before the U.S. was set to default. But Fitch Ratings downgraded the U.S. credit rating from “AAA” to “AA+” in August, citing the increasing burden of the national debt and repeated partisan standoffs over the debt limit.

Wisconsin Republicans proposed a constitutional amendment Wednesday that would curtail the governor’s veto powers by prohibiting a veto to increase any tax or fee.

The move comes after Democratic Gov. Tony Evers used his partial veto in July to increase school funding for public schools for the next 400 years. Republicans proposed a similar amendment in 2019 after Evers used his partial veto to increase school funding by $65 million, but it did not get a vote in the Legislature.

Wisconsin governors have the most expansive partial veto power in the country because, unlike in other states, they can strike nearly any part of a budget bill. That includes wiping out numbers, punctuation and words in spending bills to sometimes create new law that wasn’t the intention of the Legislature.

If passed by the Legislature in two consecutive sessions, they are then put on the ballot for voter approval. That means the soonest the latest proposal could be adopted would be 2025.