Economic News Thread | CPI 2.9% for year in 2024
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“… Farmers in the top cocoa-producing region of the world are reseeding their lands because of a mixture of bad weather, failed government policies—many of which were aimed at helping farmers—and a fast-moving virus that has ravaged their plants. …”
Stock up on your fave chocolate, I guess.
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Trump is considering a national economic emergency declaration to allow for new tariff program, sources say
“President-elect Donald Trump is considering declaring a national economic emergency to provide legal justification for a large swath of universal tariffs on allies and adversaries, four sources familiar with the matter told CNN, as Trump seeks to reset the global balance of trade in his second term.
The declaration would allow Trump to construct a new tariff program by using the International Economic Emergency Powers Act, known as “IEEPA,” which unilaterally authorizes a president to manage imports during a national emergency. …”
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Dictator for a day?
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Continued
“… Trump, one of the sources noted, has a fondness for the law, since it grants wide-ranging jurisdiction over how tariffs are implemented without strict requirements to prove the tariffs are needed on national security grounds.
… In 2019, Trump used IEEPA to threaten a 5% tariff on all Mexican imports that would rise to 25% if Mexico declined to take action to reduce the number of undocumented immigrants crossing the border with the United States.
… Trump’s advisers are evaluating the possibility of using section 338 of US trade law, which allows a president to impose “new or additional duties” against countries deemed to be discriminating against the commerce of the United States. In those cases, trade law permits the president to impose new tariffs in direct reciprocation against those countries in specific product categories – though it’s been untested in recent history.
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If Trump opted to declare a national economic emergency, which could be put into effect quickly, it’s unclear what evidence he would cite. During a press conference on Tuesday, Trump acknowledged the inherent strength of the economy, criticizing inflation but also saying, “Over the next four years the United States is going to take off like a rocket ship. But really it’s already doing it.” Trump pointed to surging economic approval ratings in recent polls.
Supporters of the tariffs say they’re essential for boosting US manufacturing.
“The Trump team understands we have to rebuild our industrial capacity for reasons of economic and national security, and it will be good for communities and American workers,” said Nick Iacovella, Senior Vice President, Coalition for a Prosperous America. “To accomplish those goals, you absolutely have to have a robust, pro-American trade policy that includes tariffs.” …”
“… Trump, one of the sources noted, has a fondness for the law, since it grants wide-ranging jurisdiction over how tariffs are implemented without strict requirements to prove the tariffs are needed on national security grounds.
… In 2019, Trump used IEEPA to threaten a 5% tariff on all Mexican imports that would rise to 25% if Mexico declined to take action to reduce the number of undocumented immigrants crossing the border with the United States.
… Trump’s advisers are evaluating the possibility of using section 338 of US trade law, which allows a president to impose “new or additional duties” against countries deemed to be discriminating against the commerce of the United States. In those cases, trade law permits the president to impose new tariffs in direct reciprocation against those countries in specific product categories – though it’s been untested in recent history.
…
If Trump opted to declare a national economic emergency, which could be put into effect quickly, it’s unclear what evidence he would cite. During a press conference on Tuesday, Trump acknowledged the inherent strength of the economy, criticizing inflation but also saying, “Over the next four years the United States is going to take off like a rocket ship. But really it’s already doing it.” Trump pointed to surging economic approval ratings in recent polls.
Supporters of the tariffs say they’re essential for boosting US manufacturing.
“The Trump team understands we have to rebuild our industrial capacity for reasons of economic and national security, and it will be good for communities and American workers,” said Nick Iacovella, Senior Vice President, Coalition for a Prosperous America. “To accomplish those goals, you absolutely have to have a robust, pro-American trade policy that includes tariffs.” …”
lawtig02
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I would certainly like to see his articulation of the emergency that justifies this enormous expansion of executive power. I’m guessing he doesn’t even bother to give us one.
ChileG
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what a fucking dumbass
superrific
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I don't care. I hope he does as many tariffs as he needs to get erect.
The FO stage is required for the FA to end.
ChileG
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So far, the scorecard is looking very bad for Trump. While his acolytes chirp that this is all part of his “negotiation” style, he is actively hurting the economy and everyday Americans.
superrific
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All the younguns who voted for Trump because housing costs must be loving the fact that home mortgage rates are the highest since last summer, and trending the wrong way.
ChileG
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After two rate cuts.
And the Fed is expected to have fewer cuts this year than previously anticipated as a direct result of Trump.
How is his lunacy helping anyone?
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“… The consumer price index rose 0.4% in December from November and finished the year up 2.9%. Economists surveyed by The Wall Street Journal had expected the CPI to advance 0.3% last month from November and 2.9% from December 2023.
… So-called core prices, which exclude volatile food and energy items, rose 0.2% from November and finished the year up 3.2%. Economists had expected increases of 0.3% and 3.3%, respectively.
Inflation as measured by the annual CPI peaked at roughly 9% in June 2022, its highest level in four decades, fueled by supply-chain snarls and labor shortages. Over the following year it subsided rapidly, falling to about 3% in June 2023 after aggressive interest-rate increases by the Federal Reserve.
But inflation’s descent since then has been slow and bumpy. …”
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“… The “core” measure of inflation, which strips out volatile food and fuel prices to give a better sense of the underlying trend, was more encouraging: The index rose 3.2 percent from a year earlier after three straight months of 3.3 percent gains. Forecasters had not expected core inflation to slow.
…
Even before Wednesday’s data, officials at the Fed had voiced increasing concern about the slow progress on inflation. At the same time, the continued strength of the labor market — including data released last week showing unexpectedly strong job growth in December — has made policymakers less worried that their efforts to rein in price increases were leading to layoffs or causing damage to the broader economy.
As a result, investors widely expect the central bank to hold interest rates steady at its meeting later this month. That would break a streak of three consecutive rate cuts, and some forecasters now say that policymakers may not lower rates at all this year. …”
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I.M.F. Raises U.S. Economic Forecast as Other Regions Lag
It is projecting 2.7 percent growth for 2025. But uncertainty about pending Trump policies looms over the global economic trajectory.“… The I.M.F. projects 2.7 percent U.S. economic growth in 2025 in its latest World Economic Outlook report, up from an estimate of 2.2 percent. That stands in stark contrast to reduced growth projections for the euro area, which the fund attributed in large part to weakness in the manufacturing sector and heightened political uncertainty.
“The big story is the divergence between the U.S. and the rest of the world,” Pierre-Olivier Gourinchas, the I.M.F.’s chief economist, said on a call with reporters this week. “We have stronger potential output growth in the U.S. compared to prepandemic, and we have weaker potential growth in other areas, like the euro area or China.”
New economic forecasts released by the fund on Friday build on its analysis in October, which showed that concerns about a postpandemic global contraction appear to have been averted, even though growth remains sluggish in many countries. Economists at the I.M.F. expect global output to grow 3.3 percent this year and next, according to the updated report, slightly above the fund’s previous projections.
… Looser fiscal policy, including tax cuts, could boost U.S. growth in the short term, the I.M.F. said in its report. “In the near term, the risks could increase the divergence between the U.S. and the rest of the world that is already underway,” Mr. Gourinchas added.
But the fund warned that expansionary measures could disrupt markets and the economy in the longer run. And while potential deregulation under President-elect Donald J. Trump could spur investment and short-term growth, the I.M.F. said an “excessive” rollback of regulations could eventually create “boom-bust dynamics” for the United States, with spillover effects elsewhere. …”