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Report from
North America
Supreme Court strikes down Trump tariffs
The US Supreme Court has struck down most of Donald
Trump’s sweeping “reciprocal” tariffs, a ruling that deals a
major blow to his signature economic policy and
represents a stinging political setback.
In a 6-3 decision issued 20 February the justices ruled the
President did not have the authority under a 1977
emergency economic powers law to impose a vast array of
import levies on goods from nearly all of the nation’s
trading partners. The decision is expected to reverberate
widely, affecting global trade, consumers, companies and
US inflation.
As part of its ruling striking down most of the President’s
tariffs, the Supreme Court’s majority did not make clear
whether the Trump administration will have to refund
billions in tariffs already collected by the Federal
government.
The federal government received nearly US$134 billion in
levies up to December last year and more than 1,000 firms
have filed lawsuits seeking tariffs refunds. In response,
Trump announced that he will impose a global 10% tariff
under a statute that limits such a move to 150 days without
congressional approval on the 22February the rate was
increased to 15%.
See: https://www.whitehouse.gov/fact-sheets/2026/02/fact-sheet-
president-donald-j-trump-imposes-a-temporary-import-duty-to-
address-fundamental-international-payment-problems/
Woodworking industry sees negative impact from
tariffs
Recent actions on tariffs are having largely negative
effects on the woodworking industry, according to a new
survey conducted by the Woodworking Network to its
subscriber base for FDMC magazine and Closets &
Organized Storage magazine.
Nearly 58% of respondents said tariffs are raising the cost
and/or availability of supplies and equipment. That has led
50% to raise prices or curtail business. More than 37%
said the tariffs “have cost us significant revenue and
profits already.”
But not all responses were negative. About one quarter of
respondents (25.3%) said the tariffs really aren’t affecting
their businesses. And slightly more than 14% supported
the tariffs, saying they are “potentially protecting my
business from foreign competition.”
See:
https://www.woodworkingnetwork.com/news/woodworking-
industry-news/woodworking-industry-sees-negative-impact-
tariffs
US housing starts rose in November, December
Housing starts rose in both November and December as
some of the headwinds in the home-building sector
subsided toward the end of 2025. Data from both months
were released by the US Department of Commerce on18
February 18 after reports were delayed by last year's
shutdown of the federal government.
Housing starts, a gauge of new residential construction,
rose 6.2% in December to 1.404 million according to the
report. That was above the 1.31 million starts expected by
a consensus of economists polled by The Wall Street
Journal. Starts were down 7.3% in December from the
same month of 2024. For November, housing starts were
up 3.9% to 1.322 million, from 1.272 million in October.
Regionally, December housing starts were up 37.4% in the
West, 5.6% in the Northeast, and 2.3% in the Midwest.
Housing starts fell by 2.8% in the South.
Optimism from the gains is tempered by a decline in
permits for future construction which points to underlying
weakness amid higher mortgage rates and material costs.
Permits for future single-family homebuilding slipped
1.7% to a rate of 881,000 units in December. They rose to
a pace of 896,000 units in November from a 878,000-unit
rate in October.
In Canada, data for January is already available and the
national housing agency says Canadian housing starts fell
more than expected, dropping 15% from December.
The seasonally adjusted annualized rate of housing starts
declined to 238,049 units from a revised 280,668 units in
December, the Canada Mortgage and Housing Corporation
(CMHC) said. Economists had expected starts to fall to
257,500.
See; https://www.census.gov/construction/nrc/current/index.html
and
https://www.cmhc-schl.gc.ca/professionals/housing-markets-
data-and-research/housing-data/data-tables/housing-market-
data/monthly-housing-starts-construction-data-tables
and
https://www.wsj.com/economy/housing/u-s-housing-starts-rose-
in-november-december-4f05e69a
Home sales decrease 8.4% in January amid foul
weather
The pace of existing home sales in the US slowed down
dramatically in January as much of the nation experienced
frigid temperatures and faced historic snowfall, according
to data released by the National Association of Realtors
(NAR). In January, the pace of existing home sales
dropped to a seasonally adjusted annual rate of 3.91
million homes, down 8.4% month-over-month and 4.4%
annually.
“The decrease in sales is disappointing. The below-normal
temperatures and above-normal precipitation this January
make it harder than usual to assess the underlying driver of
the decrease and determine if this month’s numbers are an
aberration,” Lawrence Yun, the NAR’s chief economist,
said.
While she acknowledged the weather’s role in the January
data, Lisa Sturtevant, the chief economist at Bright MLS,
attributed some of the slowdown to a decrease in pending
home sales in December.
“Many buyers stayed on the sidelines, waiting not just for
lower rates but also rate stability,” Sturtevant said.
“Therefore, the January closed sales numbers are really
reflecting conditions buyers encountered during
December.”
All regions saw sales decline. In the Northeast, there was
5.9% decrease in sales month over month to an annual rate
of 480,000, down 4.0% year over year. The Midwest saw
a 7.1% decrease in sales month over month to an annual
rate of 920,000, down 7.1% year over year. In the South,
there was a 9.0% decrease in sales month over month to an
annual rate of 1.81 million, down 1.6% year over year.
And in the West, sales decreased 10.3% month over month
for an annual rate of 700,000, down 7.9% year over year.
See: https://www.nar.realtor/newsroom/nar-existing-home-sales-
report-shows-8-4-decrease-in-january
Economic growth slowed sharply at end of 2025,
dragging down the year
The US economy cooled sharply at the end of 2025, with
growth slowing to an annual rate of 1.4%, as tariffs and a
long government shutdown sapped its earlier momentum.
Overall, the economy expanded by 2.2% last year, lower
than the 2.8% growth the year before according to new
data from the Bureau of Economic Analysis.
The latest gross domestic product report, which sums up
the goods and services produced in the United States,
reflects rising imports and a widening trade gap despite
President Donald Trump’seffort to revive US
manufacturing. Federal spending also fell sharply, in part,
because of the longest government shutdown in history,
which began in October and lasted 43 days.
Still, those subtractions were largely offset by steady
spending by American households that have been paying
more for housing, utilities, health care and other services.
Notably, spending on big-ticket items like cars and
appliances slowed last year, as new tariffs and sluggish
wage growth chipped away at families’ finances.
See: https://www.bea.gov/news/2026/gdp-advance-estimate-4th-
quarter-and-year-2025
January job gains beat expectations
US job growth was stronger than expected to start 2026,
providing some relief to concerns about the state of the US
labor market.
Non-farm payrolls increased by 130,000 for January,
above the Dow Jones consensus estimate for 55,000,
according to seasonally adjusted figures from the Bureau
of Labor Statistics. The total also was an improvement
over December, which saw a gain of 48,000 after a slight
downward revision.
The report, delayed nearly a week by the partial
government shutdown that ended February 3, held
consistent with a labor market in a low-growth mode,
though with only scattered signs of increasing layoffs.
January was the best month for payroll growth since
December 2024, following a year in which job creation
averaged just 15,000 a month.
It was a January job surge,” said Heather Long, chief
economist at Navy Federal Credit Union. “The
surprisingly strong job gains in January were driven
mainly by health care and social assistance. That’s an
encouraging sign to start the year, especially after the
hiring recession in 2025.”
Construction saw a gain of 33,000 jobs in January
following a year in which the sector saw little increase.
Manufacturing was among several industries that saw little
or no change over the month.
Along with the good January report came bad news about
previous data. Annual revisions to the jobs count
benchmarked against Census data showed that for the
April 2024-March 2025 period, payrolls growth was
898,000 lower than initially stated.
Moreover, November's previous estimate fell by 15,000
and December was off 2,000. For the final six months of
2025, the economy lost a net 1,000 jobs.
See: https://www.bls.gov/news.release/empsit.nr0.htm
and
https://www.businessinsider.com/jobs-report-january-data-live-
updates-2026-2#january-marks-a-bright-spot-after-a-dour-year-
for-job-seekers
US consumer sentiment rose to six-month high in
early February
The University of Michigan Consumer Sentiment Index
was revised down to 56.6 in February 2026 from a
preliminary 57.3, little changed from January’s 56.4. Still,
it marked the highest reading since August 2025,
following historically weak levels in recent months.
The third straight monthly improvement in sentiment
reported by the University of Michigan's Survey of
Consumers was mostly driven by consumers with the
largest stock portfolio holdings, confirming a so-called K-
shaped economy, where higher-income households are
doing well but lower-income consumers are struggling.
"We may have seen the trough in consumer sentiment as
positive fundamentals should support attitudes in 2026, as
long as the recent stock market selloff doesn't continue,"
said Oren Klachkin, financial markets economist at
Nationwide. "That said, we aren't optimistic for a sharp
rebound in consumer sentiment."
All major components showed minimal movement,
suggesting consumers see little change in economic
conditions from the prior month. About 46% of
respondents cited high prices as a strain on personal
finances, with that share remaining above 40% for seven
consecutive months.
Perceptions varied notably across groups: sentiment
improved among large stockholders but declined among
households without equities. Similarly, higher-income and
college-educated consumers reported gains, while lower-
income and less-educated respondents did not.
See: https://www.sca.isr.umich.edu/
US manufacturing shows growth for the first time in a
year
US factory activity grew for the first time in 12 months in
January as businesses placed new orders after the holiday
season but the improvement was likely temporary with
manufacturers still complaining about the uncertainty
wrought by a fluid trade policy.
Respondents in the Institute for Supply Management
survey were markedly more downbeat than optimistic.
Some survey respondents noted the emergence of what
they called an anti-American buyer sentiment while others
said the Trump administration's policies had made it
difficult to plan ahead.
President Donald Trump last month threatened additional
tariffs on European allies for rebuffing his demands for the
US to buy Greenland, before abruptly backing down. The
US Supreme Court is due to rule on the legality of Trump's
sweeping tariffs, adding another layer of uncertainty.
"Tariffs and further tariff threats are still freezing small
businesses that cannot afford to risk betting on the
president's tariff negotiation tactics paying off without the
need to implement them," said Mark Streiber, economic
analyst at FHN Financial. "Look for a decline in the index
in February."
Despite the overall growth in manufacturing, both the
Wood Products sector and the Furniture & Related
Products sector were among the eight industries reporting
contraction in January.
See: https://www.ismworld.org/supply-management-news-and-
reports/reports/ism-pmi-reports/pmi/december/
Cabinet sales trend downward again
Cabinet manufacturers reported overall cabinet sales fell
4.4% in December and were down 0.7% compared to the
same month in 2024, according to the Kitchen Cabinet
Manufacturers Association's December Trend of Business
report.
The 51 responding companies in the survey reported
overall sales of US$159.4 million for December 2025. In
the year on year comparison, December custom sales were
up 7.1% at US$46.8 million, semi-custom dropped 1.9%
to US$87.8 million, and stock sales fell 9.5%, to US$24.8
million. Respondents reported cabinet quantity for the
month fell 8.7% compared to December 2024 figures.
For the month-over-month sales comparison, survey
respondents reported decreases in custom, semi-custom,
and stock sales. Custom sales dropped 5.3%, semi-custom
fell 3.2%, and stock sales decreased 6.6% in December
versus November figures. Cabinet quantity dropped 3.1%
from the previous month.
See: https://kcma.org/insights/november-2025-trend-business-
report
North American wood product market predicted to
remain flat in 2026
North American demand for wood products will stabilise
in 2026 supported by falling interest rates and renewed
home improvement activity according to the market
intelligence firm Fastmarkets.
“While downside risk to the outlook exists, Fastmarkets
believes the significant losses from last year should pause
again in 2026 as the wood products market transitions to a
reacceleration phase later in the year that sets up solid
growth in 2027,” their 2026 North American lumber
market outlook says.
The outlook predicts residential construction, which
accounts for about 70-80% of wood products demand in
North America, should see some modest, albeit
unspectacular, improvements while home improvement
activity, which has shown signs of reacceleration, should
continue to gain momentum.
“Demand will vary by product, but we expect wood
products consumption in the US to remain flat in 2026,
with structural panel markets performing the strongest,
while nonstructural panels will experience greater
weakness as those products are still feeling the downshift
in home completions and domestic furniture and cabinet
production,” stated the Fastmarkets outlook.
The outlook also calls for softwood lumber capacity to
decline by over 1.3 billion board feet (BBF) due to
ongoing mill closures in British Columbia and the US
South. In addition, market trends suggest that lumber
duties may fall to 15%-20%, while reduced Brazilian
panel imports and continued tariffs are likely to drive
modest price increases across most wood product
categories.
See: https://www.fastmarkets.com/insights/five-predictions-for-
the-2026-north-american-wood-products-market/
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