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Why are Costco Customers Demanding IEEPA Tariff Refunds?

Posted on March 13, 2026 by Chris Lehnes

IEEPA Tariff Refunds

If you’ve noticed your Costco hauls getting a little pricier over the last year due to tariff passthrough, you aren’t alone. But a new legal battle is brewing that asks a multi-billion-dollar question: If a retailer gets a refund for the “illegal” tariff they passed on to you, who actually keeps the cash?

On Wednesday, March 11, 2026, a Costco member in Illinois filed a nationwide class-action lawsuit against the retail giant. The goal? To ensure that any tariff refunds Costco receives from the federal government end up back in the pockets of the shoppers who actually paid for them.

The Backdrop: A Supreme Court Shake-up

The drama started on February 20, 2026, when the U.S. Supreme Court ruled that the sweeping worldwide tariffs imposed last year under the International Emergency Economic Powers Act (IEEPA) were unlawful. The Court found that the executive branch had overstepped its authority, effectively turning roughly $130 billion to $175 billion in collected duties into a massive pot of refundable money.

Immediately, over 2,000 companies—including Costco—filed their own lawsuits against the government to claw that money back.

The Conflict: “Double Recovery” vs. “Better Value”

The new consumer lawsuit, led by plaintiff Matthew Stockov, argues that Costco acted as a “pass-through vehicle.” The logic is simple:

The Hike: Costco raised prices on electronics, household goods, and food to cover the cost of the tariffs.
The Refund: Now that the tariffs are struck down, Costco is suing the government to get that money back.
The “Double Dip”: If Costco keeps the refund and the extra money they already collected from shoppers via higher prices, the lawsuit alleges they are “unjustly enriched” at the expense of their members.

Costco CEO Ron Vachris recently addressed the situation, stating the company’s commitment is to return value to members through “lower prices and better values” in the future.

However, the lawsuit isn’t buying it. The legal team argues that a promise of future discounts for future shoppers doesn’t compensate the specific people who paid the “tariff tax” last year. They want direct restitution.

Is a Refund Actually Coming?

While the Supreme Court ruling is a win for importers, getting cash into the hands of individual shoppers is a legal uphill battle. Here is why:

Standing: Under federal trade law, only the “importer of record” (Costco) has the legal right to claim a refund from the government.
The Math: Proving exactly how much of a $0.50 price hike on a rotisserie chicken was due to a specific tariff vs. inflation or supply chain issues is a forensic accounting nightmare.
The Contract: Legal experts note that when you buy an item, the “contract” is the price on the tag. Retailers generally aren’t legally obligated to refund you if their internal costs go down later.

What’s Next?

Costco isn’t the only one in the crosshairs. Similar suits have been filed against FedEx and EssilorLuxottica (the makers of Ray-Ban).

If the court certifies this as a class action, it could set a massive precedent for how “corporate windfalls” are handled after major policy reversals. For now, Costco members should keep their receipts—and their eyes on the Court of International Trade.

If Costco decides to fight this in court rather than settle, their legal team will likely lean on a defense built around retail economics and contract law.

Here are the four “pillars” of defense they are expected to use:

1. The “Commingled Costs” Argument

Retail pricing isn’t a simple $1+1=2$ equation. When Costco raises the price of a television, that hike accounts for shipping fuel, labor, warehouse rent, insurance, and tariffs. Costco will likely argue that it is mathematically impossible to isolate exactly how many cents of a price increase were “just” for the tariff. Since the costs were commingled, they may argue that specific “tariff surcharges” were never actually charged to the customer.

2. Lack of “Privity” (Direct Relationship)

In trade law, the “Importer of Record” is the only entity with a legal relationship to U.S. Customs.

Costco’s stance: We paid the government; the government owes us.
The logic: There is no contract between Costco and a member that promises to pass through government refunds. When you buy a jar of almond butter, you agree to the price on the tag at that moment, regardless of Costco’s internal cost fluctuations.

3. The “Future Value” Offset

CEO Ron Vachris has already hinted at this strategy. Costco may argue that they are already fulfilling their duty to members by using anticipated refunds to lower prices across the board today. By proving they are reinvesting the money into “better values,” they can claim they are not being “unjustly enriched”—the core requirement for the plaintiff to win.

4. Administrative Impossibility

Costco has over 130 million members. Tracking every single purchase of tariff-affected goods (from socks to patio furniture) over a multi-year period and issuing individual checks would be an administrative nightmare that could cost more than the refunds themselves. They may argue that a “cy-près” award (like a general price drop or a donation to a relevant cause) is a more legal and practical remedy than individual refunds.

Comparison of Arguments

Argument	Plaintiff’s View (Shoppers)	Defense View (Costco)
Enrichment	Costco gets a “double recovery” (shoppers’ money + gov refund).	Costco is a low-margin business that “returns value” via lower future prices.
Pricing	Prices went up specifically because of tariffs.	Prices are set by market competition and total operating costs.
Equity	The specific people who paid the “tax” should get the cash.	It is impossible to track individual “tariff cents” per member.

While Costco is currently the primary target of this specific class-action pressure, other major retailers like Walmart and Target are taking noticeably different approaches to the $175 billion tariff refund opportunity.

Here is how the other giants are positioning themselves:

1. Walmart: The “Conservative Pivot”

Walmart has been more cautious in its public statements regarding specific consumer refunds. Instead of promising direct returns, they are focusing on their role as a “price stabilizer.”

The Strategy: During their recent February 2026 earnings call, Walmart leadership noted they are using their massive scale to absorb costs. Their official stance is that because they negotiate long-term contracts and used “inventory pull-forward” strategies to avoid the worst of the tariffs, they didn’t pass through costs as directly as others.
The Defense: They are positioning any potential refunds as “capital for reinvestment” into their operations and employees, which they argue ultimately benefits customers through lower prices over the long term.

2. Target: The “Supplier Squeeze”

Target’s response has been more aggressive toward its supply chain rather than the federal government.

The Strategy: Target made headlines earlier this year by reportedly asking its Chinese suppliers to absorb up to 50% of the tariff costs to keep shelf prices stable.
The Stance: Because Target forced suppliers to eat much of the cost, they may argue that they aren’t the ones owed the full refund—or that since they didn’t raise prices as much as competitors, there is no “excess profit” to return to consumers.

3. FedEx & UPS: The “Direct Pass-Through” Exception

Unlike retailers where tariff costs are buried in the price of a gallon of milk, shipping companies like FedEx and UPS often used explicit line-item surcharges labeled as “Tariff Fees.”

The Vulnerability: Because these fees were itemized, these companies are facing the most direct legal heat. FedEx has indicated in recent filings that if they receive refunds, they have a framework to pass them back to the original shippers, though the logistics of reaching the end consumer remain a “mess.”

Summary of Retailer Responses

Retailer	Public Stance on Refunds	Primary Defense
Costco	“Future value” through lower prices and better deals.	Administrative impossibility of tracking individual cents.
Walmart	Focused on reinvesting refunds into business operations.	Scaled absorption—claims they didn’t pass through 1:1 costs.
Target	Silent on customer refunds; focused on supplier negotiations.	Argues suppliers bore the cost burden, not just the retailer.
FedEx	Exploring pass-throughs for itemized surcharges.	Contractual obligations to the “shipper of record.”

Why the National Retail Federation (NRF) is Worried

The NRF, which represents all three of these companies, has called for a “seamless and automatic” refund process from the government. However, they are lobbying hard against the idea that retailers must “prove” they passed the money back to consumers, calling such requirements an “accounting nightmare” that would stall the economic boost the refunds are intended to provide.

While the lawsuit filed by Matthew Stockov seeks a blanket refund for “all affected products,” the actual legal battle centers on specific goods that were hit by the International Emergency Economic Powers Act (IEEPA) tariffs.

Because Costco sells such a wide variety of items, the impact is spread across several high-volume categories. Here are the product types most likely to be at the heart of the refund calculations:

1. Electronics and Accessories

This is a massive category for Costco and one of the hardest hit by the reciprocal tariffs.

Small Tech: Laptop bags, charging cables, and power banks.
Peripherals: Computer mice, keyboards, and monitors.
Smart Home: Security cameras and small connected appliances.
Note: Some major electronics (like certain computers) were protected under different trade laws, but “intermediate” components and accessories were often taxed at the full IEEPA rate.

2. Home Furnishings and Hard Goods

Furniture retailers have been among the first to join the “refund clamor.”

Large Furniture: Sofas, dining sets, and patio furniture.
Home Decor: Rugs, textiles, and lighting fixtures.
Kitchenware: Cookware sets and small appliances (like air fryers or coffee makers) imported from affected regions.

3. Apparel and Footwear

These items saw some of the most significant price fluctuations over the last 12 months.

Clothing: “Fast fashion” items, activewear, and outerwear.
Shoes: Sneakers and boots, particularly those where the supply chain relies heavily on international sourcing.

4. Food and Intermediate Packaging

This is the most complex category for Costco to untangle.

Imported Specialties: Specific wines, spirits, and olive oils that were subject to geopolitical surcharges.
Packaging Costs: Even for “American-made” products, the tariffs often applied to the packaging (plastic containers, coffee filters, or baby wipe canisters) imported from abroad. Proving how a tariff on a plastic tub affected the price of the 5-pound tub of animal crackers is a key hurdle for the lawsuit.

What is NOT Included?

It’s important to note that many items at Costco were taxed under different laws (like Section 232 or Section 301), which the Supreme Court did not strike down. You likely won’t see refunds for:

Steel and Aluminum products (including some appliances and car parts).
Specific Chinese-made goods covered under long-standing trade war sections.

Summary Table: Refund Potential by Category

Product Category	Refund Potential	Why?
Electronics Acc.	High	Many were hit with the 2025 “reciprocal” 10-25% tariffs.
Furniture	High	Home goods were a primary target for IEEPA-based levies.
Apparel	Medium	High volume, but often split between different tariff authorities.
Groceries	Low	Most food price hikes were tied to inflation/labor, not just tariffs.

Learn how you could obtain some of your IEEPA Tariff Refund early

Contact Factoring Specialist, Chris Lehnes

The Impact of Pump Shock on Small Business

Posted on March 6, 2026 by Chris Lehnes

While the macro economy is feeling the “pump shock,” the impact on small business lending and accounts receivable (AR) factoring is more nuanced. For many industries, rising oil prices act as a catalyst for alternative financing, as traditional bank credit tends to tighten just when operational costs spike.

1. Impact on Small Business Lending

Traditional bank lending to small businesses is becoming more restrictive as energy-driven inflation persists.

The “Double Squeeze”: Small businesses are facing higher input costs (fuel/transport) alongside high interest rates. Banks, wary of compressed profit margins, are increasing their underwriting scrutiny.
The Approval Gap: As of early 2026, large banks are approving only about 68% of small business loans, compared to 82% at smaller, community-focused institutions.
Pivot to High-Cost Credit: With traditional loans taking weeks to approve, many businesses are turning to credit cards (averaging 18%–36% interest) to cover immediate fuel and supply chain gaps, significantly increasing their long-term debt burden.

2. The Surge in AR Factoring Demand

In a high-oil-price environment, factoring often shifts from a “last resort” to a strategic cash-flow tool, particularly for energy-intensive sectors.

Fuel as a Fixed, Immediate Expense: In industries like trucking and oilfield services, fuel must be paid for daily or weekly, while customers (shippers or large operators) often demand 30- to 90-day payment terms. Factoring bridges this “cash gap” without adding traditional debt to the balance sheet.
Sector-Specific Trends:
- Transportation/Trucking: Factoring companies are seeing record demand. These businesses often enjoy the highest advance rates (90%–97%+) because their invoices are backed by tangible freight delivery.
- Oilfield Services: As drilling activity ramps up in response to higher prices (especially in the Permian Basin), service providers are using factoring to scale quickly—buying new equipment or meeting surge payroll without waiting for 60-day payouts from major oil producers.
- Manufacturing: With raw material costs rising alongside energy, manufacturers are factoring invoices to maintain liquidity reserves to buy inventory before prices hike further.

Factoring vs. Traditional Lending in 2026

Feature	Traditional Bank Loan	AR Factoring
Approval Basis	Business credit & history	Customer (Debtor) credit
Speed of Funding	2 – 7 weeks	24 – 48 hours
Debt Load	Increases liability on balance sheet	No new debt (selling an asset)
Scalability	Fixed limit	Grows with your sales volume
Cost	Lower interest (6%–12%)	Higher fees (1%–5% per 30 days)

Strategic Outlook

For the remainder of 2026, businesses that rely on “floating” cash flow are likely to prioritize speed over cost. While factoring fees are higher than bank interest, the ability to access cash within 24 hours to pay for $4.00/gallon diesel is often the difference between staying operational and grounding a fleet.

In a volatile economy where oil prices are surging and traditional banks are pulling back, choosing the right financing tool is a high-stakes decision. For B2B businesses—especially those in staffing, digital marketing, and manufacturing—the choice often comes down to the speed of Factoring versus the lower cost of a Bank Loan.

Below is a strategic comparison designed to help you evaluate which path aligns with your current cash flow needs.

Factoring vs. Bank Loans: 2026 Strategic Comparison

Feature	Accounts Receivable Factoring	Traditional Bank Loan
Speed to Cash	Ultra-Fast: Funds usually arrive within 24–48 hours after invoice setup.	Slow: Approval typically takes 30–90 days of underwriting.
Credit Focus	The Debtor: Decisions are based on your customer’s credit and payment history.	The Business: Based on your FICO score, tax returns, and years in business.
Balance Sheet	Debt-Free: It is the sale of an asset (invoices), not a liability.	Debt-Heavy: Adds a liability that can impact your debt-to-income ratio.
Scalability	Unlimited: As your sales grow, your available cash grows automatically.	Fixed: You are capped at a set amount and must re-apply to increase it.
Total Cost	Higher Fees: Usually 1%–5% per 30 days (effective APR is higher).	Lower Rates: Typically 6%–12% APR for qualified businesses.
Risk	Low: No collateral like your house or equipment is typically required.	High: Often requires a blanket lien on assets or personal guarantees.

Export to Sheets

The “Why Now?” Factor: Navigating 2026 Volatility

Pros of Factoring in This Market

Immediate Fuel/Supply Buffer: With diesel prices fluctuating, factoring gives you the cash today to buy inventory or fuel before the next price hike.
Protects Your Growth: In sectors like digital marketing or staffing, you can’t wait 60 days for a client to pay to meet your weekly payroll. Factoring ensures your team stays paid regardless of when the client cuts the check.
No “Covenant” Stress: Bank loans often come with strict “covenants” (rules about your profit margins). If high oil prices temporarily squeeze your margins, a bank might call your loan; a factor simply keeps funding your sales.

Cons to Consider

Margin Impact: If your profit margins are already thin (common in food production or distribution), the 1%–3% factoring fee could eat up a significant portion of your net income.
Customer Perception: While widely accepted today, some ultra-conservative clients might still prefer to pay you directly rather than a third-party factor.

The Bottom Line

If you have long-term stability and time to wait, a Bank Loan is cheaper. However, if you are growing rapidly or facing unpredictable costs, Factoring acts as a flexible insurance policy for your cash flow.

Contact Factoring Specialist, Chris Lehnes

Unexpected Downturn: US Economy Sheds 92,000 Jobs in February 2026

Posted on March 6, 2026 by Chris Lehnes

Economy Sheds 92,000 Jobs

Economy Sheds 92,000 Jobs. The American labor market hit a significant speed bump last month, as the Bureau of Labor Statistics (BLS) reported a loss of 92,000 jobs for February 2026. This unexpected contraction caught economists off guard, as many had projected a modest gain of roughly 60,000 positions.

Coupled with the job losses, the national unemployment rate ticked up to 4.4%, rising from 4.3% in January. While the figure remains low by historical standards, the sudden reversal in momentum has reignited concerns about the underlying health of the economy amidst ongoing geopolitical tensions and domestic labor disputes.

The Numbers at a Glance

The February report was a stark contrast to the start of the year, which initially saw a healthy gain in January. However, even those numbers were revised downward, painting a picture of a job market that is struggling to maintain its footing.

Metric	February 2026 Data	Comparison
Nonfarm Payrolls	-92,000	Down from +126,000 (revised) in Jan
Unemployment Rate	4.4%	Up from 4.3%
December Revision	-17,000	Revised down from +48,000
Labor Force Participation	62.0%	Lowest level since December 2021

Key Drivers of the Decline

Several factors converged to create the “perfect storm” that led to February’s disappointing figures:

Labor Disputes: The healthcare sector, usually a reliable engine of growth, shed 28,000 jobs. Much of this was attributed to a major strike involving over 30,000 workers at Kaiser Permanente in California and Hawaii.
Harsh Winter Weather: Severe storms across the country likely hampered hiring in the construction sector, which saw a decline of 11,000 jobs.
Sector-Specific Weakness: The Information and Transportation/Warehousing sectors both lost 11,000 jobs, while the Federal Government continued its downward trend, losing 10,000 positions.
Geopolitical Uncertainty: The escalation of the conflict in the Middle East has driven up crude oil prices, injecting a new layer of caution into business spending and hiring plans.

“Just when it looked like the labor market was stabilizing, this report delivers a knock-down blow to that view. It’s bad news whichever way you look at it.”

— Olu Sonola, Head of U.S. Economics at Fitch Ratings.

Silver Linings and the Path Forward

Despite the gloomy headline, there were a few areas of resilience. Average hourly earnings rose by 0.4% for the month, representing a 3.8% increase year-over-year. This suggests that while hiring has slowed, those currently employed are still seeing wage growth that is largely keeping pace with inflation.

The Federal Reserve now faces a delicate balancing act. While the job losses might typically signal a need for interest rate cuts to stimulate the economy, the surge in energy prices due to the war in Iran keeps the threat of inflation high.

Economists will be looking toward the March report (scheduled for release on April 3rd) to determine if February was a temporary blip caused by weather and strikes, or the start of a more concerning long-term trend.

Contact Factoring Specialist, Chris Lehnes

The Hold-Out is Over: Companies Are Raising Prices Again

Posted on February 16, 2026 by Chris Lehnes

Prices are going up…

Remember that brief sigh of relief? The one where it felt like maybe, just maybe, the relentless march of price increases was slowing down? Well, if you’ve been to the grocery store, filled up your gas tank, or even just browsed online recently, you’ve probably noticed it: the break is over. Companies are jacking up prices again, and consumers are once again feeling the pinch.

For a while, many economists and analysts pointed to easing supply chain issues, stabilizing energy costs, and even a slight dip in consumer demand as potential signals that inflation was cooling. Some businesses even held the line on prices, perhaps hoping to retain market share or out of a genuine desire to give their customers a break.

But those days seem to be largely behind us. We’re seeing a resurgence in price hikes across a wide array of sectors. From everyday necessities to discretionary items, the numbers on the tags are climbing.

What’s Driving This Latest Surge?

Several factors are likely contributing to this renewed upward trend:

Persistent Input Costs: While some raw material costs have stabilized, others continue to be elevated. Labor costs are also a significant factor, with many businesses facing pressure to offer higher wages to attract and retain employees. These increased operational expenses often get passed on to the consumer.
Strong Consumer Demand (Still): Despite earlier predictions of a significant slowdown, consumer demand has proven remarkably resilient in many areas. When demand remains high, businesses have less incentive to lower prices and more leeway to raise them.
“Catch-Up” Pricing: Some companies might feel they absorbed increased costs for a period and are now playing catch-up, adjusting prices to reflect their sustained operational expenses.
Geopolitical Factors: Global events continue to create volatility in commodity markets, particularly for energy and certain raw materials, which inevitably impacts production and transportation costs.
Profit Margins: Let’s be honest, businesses are in the business of making a profit. If they perceive an opportunity to increase their margins without significantly impacting sales volume, many will take it.

What Does This Mean for You?

For the average household, this renewed wave of price increases means a continued squeeze on budgets. Discretionary spending may need to be curtailed further, and even essential purchases will require more careful planning. Savings might deplete faster, and the goal of financial stability could feel increasingly distant.

How Can Consumers Cope?

While we can’t control the broader economic forces at play, there are strategies consumers can employ to mitigate the impact:

Become a Savvy Shopper: Compare prices diligently, look for sales and discounts, and consider generic or store-brand alternatives.
Budgeting is Key: Revisit your budget and identify areas where you can cut back. Track your spending to understand exactly where your money is going.
Prioritize Needs vs. Wants: Distinguish between essential purchases and items that can be deferred or eliminated.
Support Local (Where Affordable): Sometimes local businesses, with lower overheads, can offer competitive pricing, or at least you’re supporting your community.
Advocate for Yourself: When possible, negotiate prices for services, or look for loyalty programs that offer discounts.

The “break” from rising prices was indeed short-lived. As companies continue to adjust their pricing strategies, it’s more important than ever for consumers to be vigilant, adapt their spending habits, and advocate for their financial well-being.

Contact Factoring Specialist, Chris Lehnes

German Factory Orders Unexpectedly Soar

Posted on February 13, 2026 by Chris Lehnes

Frankfurt, Germany:

In a surprising turn of events, German factory orders in have shown an unexpected and robust surge, signaling a potentially stronger-than-anticipated rebound in the nation’s industrial sector. This latest data has instilled a renewed sense of optimism among economists and policymakers, suggesting that Europe’s largest economy might be on a more solid recovery path than previously estimated.

The Federal Statistical Office announced this morning that new factory orders jumped by a significant margin in the past month, far exceeding analyst expectations. This remarkable uptick follows a period of cautious growth and even some contractions, making the current surge all the more impactful. The increase was broad-based, with both domestic and international orders contributing substantially to the overall rise.

A Deeper Dive into the Numbers

The reported increase in orders was particularly driven by strong demand for capital goods, indicating that businesses are investing more in machinery and equipment – a key indicator of future production capacity and confidence. Intermediate goods also saw a healthy boost, suggesting renewed activity across various supply chains.

Economists are pointing to several factors contributing to this positive development. A resilient global demand, particularly from key trading partners, appears to be playing a significant role. Furthermore, a gradual easing of supply chain bottlenecks, which have plagued manufacturers for months, is allowing companies to fulfill orders more efficiently and take on new business.

Impact on the Broader Economy

This unexpected surge in factory orders is a shot in the arm for the German economy, which has been grappling with persistent inflation and the lingering effects of global uncertainties. A strong industrial sector is crucial for Germany’s economic health, as it is a major employer and a significant contributor to GDP. The improved outlook could lead to increased hiring, higher wages, and ultimately, stronger consumer spending.

Contact Factoring Specialist, Chris Lehnes

U.S. Inflation Shows Promising Easing at the Start of the Year

Posted on February 13, 2026 by Chris Lehnes

2.4% rate is lower than expected

The latest economic data brings a sigh of relief for consumers and policymakers alike, as U.S. inflation has shown a more significant easing than anticipated at the beginning of the year. This positive development suggests that efforts to tame rising prices may be gaining traction, offering a glimmer of hope for greater economic stability in the months to come.

For much of the past year, inflation has been a persistent headwind, impacting everything from grocery bills to housing costs. The robust labor market, while a sign of economic strength, also contributed to upward price pressures. However, recent reports indicate a potential shift in this trend.

Several factors appear to be contributing to this welcome slowdown. Supply chain disruptions, which were a major catalyst for price increases, have largely improved. This has allowed for a more consistent flow of goods, reducing bottlenecks and associated costs. Additionally, the Federal Reserve’s aggressive monetary policy, including multiple interest rate hikes, seems to be having its intended effect of cooling demand and reining in inflationary expectations.

While the easing of inflation is certainly good news, it’s important to maintain a balanced perspective. The economy is a complex system, and various forces are constantly at play. Energy prices, geopolitical events, and shifts in consumer spending habits can all influence the trajectory of inflation. Therefore, continuous monitoring and adaptive policymaking will remain crucial.

What does this mean for the average American? For starters, it could translate into less pressure on household budgets over time. If the trend continues, we might see more stable prices for everyday goods and services, allowing purchasing power to stretch further. It also provides the Federal Reserve with more flexibility in its future policy decisions, potentially reducing the need for further aggressive rate hikes.

The journey to sustained price stability is an ongoing one, but the early signs from this year are undoubtedly encouraging. It’s a testament to the resilience of the U.S. economy and the effectiveness of concerted efforts to address inflationary pressures. As we move further into the year, economists and consumers alike will be watching closely to see if this promising trend continues, paving the way for a more predictable and stable economic environment.

Contact Factoring Specialist, Chris Lehnes

Home Sales Take a January Dip: What Does It Mean for the Market?

Posted on February 12, 2026 by Chris Lehnes

Home Sales Take a January Dip: What Does It Mean for the Market?

The housing market, often a dynamic and unpredictable beast, just delivered a notable headline: home sales in January experienced their most significant monthly decline in nearly four years. This news might spark a bit of anxiety for some, and perhaps a glimmer of hope for others. But what’s truly behind this downturn, and what could it signal for the months ahead?

According to recent reports, the seasonally adjusted annual rate of existing home sales saw a substantial drop last month. This marks a notable shift after a period where the market showed some signs of stabilizing, or even modest recovery, in late 2023.

What’s Driving the Decline?

Several factors are likely at play in this January slump:

Mortgage Rate Volatility: While rates have come down from their peaks, they’ve also experienced some upward swings, creating uncertainty for prospective buyers. Higher rates directly impact affordability, pushing some buyers to the sidelines.
Persistent Inventory Shortages: Despite the dip in sales, the fundamental issue of low housing inventory remains a significant challenge in many areas. Fewer homes on the market mean less choice for buyers, and can still keep prices elevated, even with softening demand.
Seasonal Slowdown (Exacerbated): January is typically a slower month for real estate activity due to holidays and winter weather. However, the magnitude of this decline suggests more than just a typical seasonal lull. It could indicate that underlying market pressures are intensifying.
Affordability Challenges: The combination of elevated home prices and higher interest rates continues to stretch buyer budgets thin. For many, especially first-time homebuyers, the dream of homeownership remains a distant one.
Economic Uncertainty: Broader economic concerns, even if subtle, can influence consumer confidence. Worries about inflation, job security, or a potential recession can lead people to postpone major financial decisions like buying a home.

Is This the Start of a Larger Trend?

It’s crucial not to jump to conclusions based on a single month’s data. Real estate markets are complex and influenced by numerous variables. However, a decline of this magnitude certainly warrants close attention.

Potential for Price Adjustments: A sustained drop in demand, particularly if inventory levels begin to rise, could eventually lead to more significant price corrections in some markets. Buyers who have been waiting for prices to come down might see this as a positive sign.
Opportunity for Buyers? For those who are financially secure and ready to buy, a less competitive market could present opportunities. Fewer bidding wars and potentially more negotiating power could be on the horizon if the trend continues.
Impact on Sellers: Sellers might need to adjust their expectations. Pricing strategically and ensuring homes are in top condition will become even more critical in a market where buyers have more leverage.

Looking Ahead

The coming months will be telling. We’ll need to watch several key indicators:

Mortgage Rate Movements: Any significant and sustained drop in interest rates would likely bring buyers back into the market.
Inventory Levels: A notable increase in homes for sale would help alleviate pressure and potentially lead to more balanced market conditions.
Economic Data: Broader economic health, including inflation and employment figures, will continue to play a role in consumer confidence and housing demand.

While January’s numbers present a cautious start to the year for the housing market, they also highlight the ongoing adjustments and recalibrations happening. Whether this dip is a temporary blip or a harbinger of more significant changes remains to be seen, but it’s a clear reminder that the real estate landscape is always evolving.

Contact Factoring Specialist, Chris Lehnes

U.S. Added 130,000 Jobs in January – More than expected

Posted on February 11, 2026 by Chris Lehnes

The U.S. labor market began 2026 with a surprising burst of energy, shaking off a sluggish 2025. According to the latest data from the Bureau of Labor Statistics (BLS) released on February 11, 2026, employers added 130,000 jobs in January—easily doubling December’s figures and blowing past economist expectations of roughly 70,000.

While the report was delayed by a week due to a brief federal government shutdown, the results suggest that the “hiring fatigue” seen late last year might be beginning to thaw.

The Numbers at a Glance

The January report offers a mix of resilience and necessary context for the year ahead:

Total Jobs Added: 130,000 (up from a revised 50,000 in December).
Unemployment Rate: Ticked down to 4.3% (from 4.4%).
Average Hourly Earnings: Rose by 0.4% in January, bringing the year-over-year increase to 3.7%.
Labor Force Participation: Remained steady at 62.5%.

Sector Winners and Losers

The growth wasn’t uniform across the board. In fact, a few key sectors carried the heavy lifting for the entire economy:

Healthcare & Social Assistance: This sector remains the titan of the U.S. job market, adding 124,000 jobs (82k in healthcare and 42k in social assistance).
Construction: Added a solid 33,000 jobs, largely driven by nonresidential specialty trade contractors.
The Tech & White-Collar Slump: Conversely, professional and business services and manufacturing continued to struggle, reflecting ongoing shifts in AI implementation and trade policy impacts.
Government: Federal employment saw a decline, partly a ripple effect of recent policy shifts and the temporary shutdown.

Why This Matters

After a tumultuous 2025—which was recently revised to show only 181,000 total jobs added for the entire year—this January figure is a massive sigh of relief. It suggests that while the economy isn’t sprinting, it’s found its footing.

“The January gains are a sign that the labor market is stabilizing,” says one economist. “However, the high concentration of growth in healthcare suggests a ‘one-legged stool’ economy that we need to watch closely.”

Looking Ahead

While 130,000 jobs is a “stronger footing,” the market remains complex. Layoffs in high-profile sectors like tech and transportation (notably Amazon and UPS) dominated January headlines, yet the aggregate data shows that other sectors are more than absorbing that displaced talent.

For job seekers, the message is clear: the opportunities are there, but they have shifted. Strategic hiring is the theme of 2026, with a high premium on specialized skills in healthcare, infrastructure, and adaptive technologies.

The January jobs report has effectively shifted the narrative for the Federal Reserve. While the 130,000 jobs added might seem modest by historical standards, it was a significant “beat” compared to expectations, and it has given the Fed a reason to tap the brakes on further interest rate cuts.

Here is how the latest data is influencing the Fed’s next move:

1. From “Easing” to “Holding”

Following three consecutive rate cuts in late 2025, the Federal Reserve held rates steady at its January 28, 2026 meeting, maintaining the federal funds rate at 3.5% to 3.75%. This jobs report reinforces that “pause.”

The Consensus: With the unemployment rate ticking down to 4.3% and job growth doubling December’s numbers, there is no longer an “emergency” need to stimulate the economy.
Market Sentiment: Before this report, some traders were betting on a March cut. Now, CME FedWatch tools show those odds have plummeted, with the consensus moving toward a “higher for longer” stance through at least the first half of the year.

2. Emerging Internal Division

The Fed is no longer acting in total unison. The January meeting saw a rare 10-2 vote, with two dissenting members actually pushing for another 25-basis-point cut due to lingering concerns about long-term hiring weakness.

The Hawks: Officials like Cleveland Fed President Beth Hammack and Dallas Fed President Lorie Logan have signaled that the Fed should “err on the side of patience,” arguing that current rates are “neutral”—neither helping nor hurting the economy.
The Doves: Those worried about the “one-legged stool” (growth coming only from healthcare) fear that without more cuts, sectors like tech and manufacturing will continue to bleed jobs.

3. The “Neutral Rate” Debate

Chair Jerome Powell recently noted that the economy is on a “firm footing” entering 2026. Analysts now believe the Fed is searching for the neutral rate—the sweet spot where inflation stays at 2% without triggering a recession.

Because average hourly earnings rose 0.4% in January (3.7% annually), the Fed is wary that cutting rates too soon could reignite inflation, especially with potential new trade tariffs on the horizon.

Key Dates to Watch

Event	Date	Significance
January CPI Report	Feb 13, 2026	Will confirm if the wage growth in the jobs report is driving up prices.
Fed “Beige Book”	Mar 4, 2026	Regional reports on how small businesses are actually feeling.
Next FOMC Meeting	Mar 17-18, 2026	The next formal window for a rate change decision.

For a small business owner, the January jobs report isn’t just about hiring statistics—it’s a leading indicator for the cost of your next loan or line of credit.

Following the stronger-than-expected labor data, the Federal Reserve has hit “pause” on interest rate cuts. For businesses at Versant Funding and across the U.S., this means a period of “stabilized high” borrowing costs. Here is what your business needs to know to navigate the financial landscape of early 2026.

2026 Borrowing Outlook: The “Data-Driven” Pause

The Fed began 2026 by holding the federal funds rate steady at 3.5% to 3.75%. While the market had hoped for more aggressive easing, the surge of 130,000 new jobs in January has signaled to policymakers that the economy is not yet in need of more “cheap money.”

Current Lending Rates (As of February 2026)

Loan Type	Typical APR Range	Key Note
SBA 7(a) Loans	9.75% – 14.75%	Variable rates fluctuate with the Prime Rate (currently 6.75%).
SBA 504 Loans	5% – 7%	Fixed-rate; best for long-term real estate or equipment.
Business Lines of Credit	10% – 28%	Vital for seasonal inventory and payroll gaps.
Accounts Receivable Factoring	24% – 36%	High speed; based on invoice value rather than credit score.

Three Strategies for Small Businesses

With rates unlikely to drop significantly before the summer, owners should shift from “waiting for better rates” to “optimizing current cash flow.”

Prioritize Variable-Rate Debt: If you are carrying an SBA 7(a) loan or a variable line of credit, your payments will remain flat for now. Use this stability to pay down principal where possible, as the “higher for longer” stance means interest costs won’t be melting away anytime soon.
Look for “Mission-Driven” Financing: In 2026, the SBA is waiving guarantee fees for certain small manufacturers (NAICS 31-33). If your business fits this category, you could save thousands in upfront costs regardless of the interest rate.
Leverage Asset-Based Lending: If traditional bank term loans are too restrictive, consider Invoice Factoring or Equipment Financing. These options often focus more on the value of your assets (your unpaid invoices or machinery) than on the Fed’s baseline rates, providing more predictable access to capital during economic volatility.

The Bottom Line

The “stronger footing” of the U.S. labor market is a double-edged sword: it proves consumer demand is resilient, but it keeps the cost of capital elevated. For 2026, the most successful businesses will be those that prioritize liquidity and debt structure over simply chasing the lowest rate.

Contact Factoring Specialist, Chris Lehnes

The “Degree Dilemma”: Why the Class of 2026 is Facing a Tougher Employment Landscape

Posted on February 9, 2026 by Chris Lehnes

For decades, the path to employment followed a predictable script: graduate high school, earn a four-year degree, and step into a stable career. But for the Class of 2026 and other recent grads, that script has been heavily revised.

While the national unemployment rate remains relatively stable, a closer look reveals a “white-collar friction” that is hitting young graduates particularly hard. Recent data suggests that unemployment for workers aged 22–27 is significantly higher than for the general population, with some reports showing rates as high as 5.3% to 5.7% for new degree holders compared to just 2.5% for their more experienced counterparts.

Why is the “college advantage” seemingly cooling off? Here are the primary factors reshaping the entry-level landscape.

1. The “Bottom Rung” is Being Automated

Perhaps the most significant shift in 2026 is the impact of Generative AI. Historically, junior roles involved “intellectually mundane” tasks: drafting reports, organizing data, or basic coding. These were the “training wheels” of a career.

Today, AI agents handle these tasks with 90% accuracy in seconds.

The Result: Companies are becoming more “top-heavy.” They still need experienced managers to oversee AI, but they need fewer junior employees to do the legwork.
The Crunch: Entry-level hiring has seen double-digit declines in sectors like tech and finance, as firms use AI to boost productivity without expanding their headcount.

2. The Great “Stay Put” (Low Churn)

In a healthy economy, people switch jobs, creating “openings” at the bottom for new talent. In 2026, we are seeing a collapse in voluntary job switching.

“Workers are holding onto their roles because the market feels risky; as a result, the natural ‘churn’ that usually pulls recent grads into the workforce has stalled.”

When mid-level employees don’t move up or out, the entry-level pipeline remains clogged.

3. The Rising “Skills Gap” vs. Academic Focus

There is a growing disconnect between what is taught in the classroom and what is required in a modern office.

The Degree is the Baseline, Not the Finish Line: Employers are shifting toward skills-based hiring. According to NACE, 70% of employers now prioritize specific technical skills and AI fluency over the prestige of the degree itself.
Experience Over Everything: Job postings that once asked for 0–2 years of experience are increasingly demanding 3+ years or specific internships. For a recent grad, this creates the classic paradox: You can’t get the job without experience, but you can’t get experience without the job.

4. Market Saturation

We are currently seeing the result of “education-neutral” growth. The supply of college graduates has increased steadily, but demand for roles that specifically require a degree has leveled off. This has led to a rise in underemployment, where graduates find themselves in roles that don’t actually require their hard-earned credentials.

What Can Grads Do?

The market is tougher, but it isn’t closed. To stand out in the current environment, graduates must:

Prioritize AI Literacy: It’s no longer a “plus”; it’s a requirement. Show how you use AI to work faster and smarter.
Focus on “Human-Centric” Skills: Emphasize critical thinking, complex problem solving, and emotional intelligence—things AI still struggles to replicate.
Treat Internships as Essential: In 2026, an internship is often the only way to bypass the “3 years of experience” requirement.

Contact Factoring Specialist, Chris Lehnes

Sluggish Job Growth to Kick Off 2026

Posted on February 6, 2026 by Chris Lehnes

The Sluggish Job Growth of the U.S. labor market is currently sending mixed signals that lean toward the “rough” side. After months of subtle hiring freezes and quiet cutbacks, the dam has seemingly broken, leading to a wave of high-profile layoff announcements that have left both job seekers and investors on edge.

From “Quiet Quitting” to “Quiet Hiring”… to Just “Quiet”

Last year, the narrative was dominated by “labor hoarding”—companies holding onto staff despite economic uncertainty. That trend has officially cooled. What we are seeing now is a three-phase retraction:

The Big Freeze: Before the layoffs began, many firms implemented unannounced hiring freezes. If you noticed your applications disappearing into a “black hole” in Q4, you weren’t imagining it.
The Strategic Cut: We’ve moved past the “growth at all costs” mindset of the early 2020s. Companies are now optimizing for efficiency, which often means trimming middle management and non-core departments.
Market Rattling: These moves aren’t just affecting workers; they’re making Wall Street twitchy. While layoffs sometimes boost stock prices in the short term by promising better margins, a systemic pullback in hiring signals a lack of confidence in broader consumer spending.

Why is this happening now?

It’s a perfect storm of economic factors. Interest rates remain a point of contention, and the “higher for longer” reality has finally forced CFOs to tighten the belt. Additionally, the rapid integration of AI and automation is no longer a futuristic concept—it’s actively reshaping how companies budget for human capital.

Key Takeaway: The power dynamic has shifted. We are no longer in the “Great Resignation” era where candidates held all the cards. We are in an “Employer’s Market” characterized by high competition and rigorous vetting.

Survival Tips for the 2026 Job Seeker

If you’re currently in the trenches or worried about your role, “rough” doesn’t have to mean “impossible.” Here is how to adapt:

Focus on ‘Recession-Proof’ Skills: Lean into roles that directly impact revenue or operational efficiency.
Networking is the New Resume: With hiring portals frozen or flooded, a warm introduction is often the only way to bypass the digital gatekeepers.
Audit Your Tech Literacy: Companies are hiring for roles that can leverage new tools to do more with less. Show that you are that person.

The January chill in the job market is a sobering reminder that economic cycles are inevitable. While the headlines look daunting, history shows that these periods of contraction often lead to leaner, more resilient industries. The goal for now? Stay agile, stay informed, and keep your pulse on the shifting landscape.

Contact Factoring Specialist, Chris Lehnes

Every year, we’re told that January is the season for “new beginnings.” But for many of my colleagues and friends, 2026 started with a calendar invite that no one wants to see.

With over 100,000 layoffs announced just last month, it’s easy to feel like the ground is shifting beneath us. It’s frustrating to see companies freeze hiring right when talented people are looking for their next chapter.

What I’ve learned during market shifts like this:

Your job is what you do, not who you are. Resilience starts with separating your self-worth from a corporate headcount.
The “Hidden Market” is real. When the portals freeze, the human network thaws. Most of the hiring right now is happening through referrals and back-channel conversations.
Skill-stacking is the best defense. The folks I see landing roles right now are the ones who didn’t just wait—they spent the “freeze” learning how to leverage AI to make themselves a “team of one.”

If you were part of the January cuts, take a breath. The market is rough, but you are capable.

If I can help you with a referral, a resume check, or just a word of encouragement, please reach out. Let’s help each other get through the “January Chill.” ☕️👇

#CareerResilience #Leadership #JobSearch #CommunitySupport

January just delivered a wake-up call to the U.S. workforce. Here’s the “lowdown” on the slowdown:

108k+: Layoffs announced in the last 31 days (the highest since ’09).
Record Lows: Hiring plans have hit a historic slump for Q1.
The Shift: Efficiency and AI-proficiency are officially the new “must-haves.”

The bottom line? The “Great Resignation” is a memory. We are now in the “Great Recalibration.”

If you’re hiring, post your roles in the comments. If you’re looking, tell us one “efficiency win” you’ve had recently. Let’s turn this feed into a resource.

#MarketUpdate #Recruiting #Hiring2026 #BusinessTrends

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