Economic News Thread | Consumer Confidence declines

[CFordUNC]

So now that Trump is in office, inflation is a good thing, right? Or at least not a bad thing?

Do I understand that correctly?

 

[Enigma94]

LOL at get over it regarding inflation. Christ almighty can these people be bigger hypocrites?

 

[CFordUNC]

"Let them eat cake" didn't end so well last time!

 

[superrific]

Trump’s Return Nudges Economists’ Inflation Outlook Higher​

Survey finds tariffs, tax cuts and immigration policy could weigh on prices for next two years​

——
On the plus side, economists were 100% sure there would be a recession during Biden’s term, so maybe this means that inflation will magically disappear despite Trump policies …

1. It is not true that 100% of economists were 100% sure there would be a recession. Not even close. In fact, I don't know of any economist who was 100% sure of that.

2. I honestly don't understand that 0.4% inflation estimate. Maybe they are modeling something like 10% tariffs even as Trump is promising something higher. Ironically, a 10% worldwide tariff would probably be less inflationary than a 25% tariff on Canada and Mexico. Or maybe they are figuring that some industries will just disappear, so the would-be doubling of auto prices (for instance) are just excluded.

0.4% is just incredibly low considering that imports are 14% of GDP. If you tariff all of that at 10%, that's 1.4% right off the bat. Now, the market will adjust and imports will be reduced (via consumer choice and currency adjustment), but domestic firms will be able to increase their prices in absence of foreign competition. I would estimate that in a lot of industries, a 10% tariff would lead to at least a 1.5-2% price increase in domestic prices.

3. It is possible that they are modeling the decline in growth (including recession possibility) from the tariffs, which would be counter-inflationary but also make Americans poorer.

 

[ChileG]

So now that Trump is in office, inflation is a good thing, right? Or at least not a bad thing?

Do I understand that correctly?

I might have missed something. Why are tariffs good for national security?

 

[nycfan]

1. It is not true that 100% of economists were 100% sure there would be a recession. Not even close. In fact, I don't know of any economist who was 100% sure of that.

2. I honestly don't understand that 0.4% inflation estimate. Maybe they are modeling something like 10% tariffs even as Trump is promising something higher. Ironically, a 10% worldwide tariff would probably be less inflationary than a 25% tariff on Canada and Mexico. Or maybe they are figuring that some industries will just disappear, so the would-be doubling of auto prices (for instance) are just excluded.

0.4% is just incredibly low considering that imports are 14% of GDP. If you tariff all of that at 10%, that's 1.4% right off the bat. Now, the market will adjust and imports will be reduced (via consumer choice and currency adjustment), but domestic firms will be able to increase their prices in absence of foreign competition. I would estimate that in a lot of industries, a 10% tariff would lead to at least a 1.5-2% price increase in domestic prices.

3. It is possible that they are modeling the decline in growth (including recession possibility) from the tariffs, which would be counter-inflationary but also make Americans poorer.

​

​

Economists Predicted a Recession. So Far They’ve Been Wrong.​

A widely predicted recession never showed up. Now, economists are assessing what the unexpected resilience tells us about the future.


“… Many economists spent early 2023 predicting a painful downturn, a view so widely held that some commentators started to treat it as a given. Inflation had spiked to the highest level in decades, and a range of forecasters thought that it would take a drop in demand and a prolonged jump in unemployment to wrestle it down. …”

Economists Predicted a Recession. So Far They’ve Been Wrong.

A widely predicted recession never showed up. Now, economists are assessing what the unexpected resilience tells us about the future.

www.nytimes.com

 

[Healing]

"Let them eat cake" didn't end so well last time!

It won’t end well this time either.

 

[nycfan]

“… In his flurry of orders and memos this week, Trump definitively withdrew already shaky US support for the global compromise on taxing the profits of multinational corporations, a reform painstakingly worked out over the past decade. He also threatened punitive retaliation on any country levying “extraterritorial” or “discriminatory” taxes on US multinationals.




… With a stroke of a pen, Trump has raised the risk that a whole web of cross-border investment stakes might be unwound.”

Trump’s assault on the global corporate tax regime

President threatens retaliation against ‘discriminatory’ levies on US multinationals

www.ft.com

——
A lot of Trump’s disruptive power comes from a willingness to ignore the law and Constitution, but also because the Congress has been so frozen that far too much is being done by executive order to keep gears from grinding to a halt. This profit sharing tax deal never passed Congress but was being implemented with our partners in reliance on the POTUS implementing it through executive orders and tax policy making.

 

[lawtig02]

“… In his flurry of orders and memos this week, Trump definitively withdrew already shaky US support for the global compromise on taxing the profits of multinational corporations, a reform painstakingly worked out over the past decade. He also threatened punitive retaliation on any country levying “extraterritorial” or “discriminatory” taxes on US multinationals.




… With a stroke of a pen, Trump has raised the risk that a whole web of cross-border investment stakes might be unwound.”

Trump’s assault on the global corporate tax regime

President threatens retaliation against ‘discriminatory’ levies on US multinationals

www.ft.com

——
A lot of Trump’s disruptive power comes from a willingness to ignore the law and Constitution, but also because the Congress has been so frozen that far too much is being done by executive order to keep gears from grinding to a halt. This profit sharing tax deal never passed Congress but was being implemented with our partners in reliance on the POTUS implementing it through executive orders and tax policy making.

 

[BlooVooDoo]

"Let them eat cake" didn't end so well last time!

MAGA loves cake.

 

[nycfan]

 

[JCTarheel82]

https://www.cnn.com/2025/01/25/business/egg-prices-avian-flu-outbreak

"Egg prices are estimated to increase about 20% in 2025, compared to about 2.2% for food prices in general, according to the US Department of Agriculture’s price outlook. Beef, coffee and orange juice are among groceries with higher prices, but eggs are uniquely impacted by the aggressive strain of avian flu, which has strained supply."

 

[nycfan]

 

[lawtig02]

 

[heelinhell]

Once we get rid of all the brown skin immigrants the price of eggs will plummet bigly...

 

[nycfan]

“… MARGARET BRENNAN: You campaigned on lowering prices for consumers. We've seen all of these executive orders. Which one lowers prices?

VICE PRESIDENT VANCE: Well, first of all, we have done a lot, and there have been a number of executive orders that have caused, already, jobs to start coming back into our country, which is a core part of lowering prices. More capital investment, more job creation in our economy, is one of the things that's going to drive down prices for all consumers, but also raise wages so that people can afford to buy the things that they need. If you look at our slate of executive orders--

MARGARET BRENNAN: So, grocery prices aren't going to come down?

VICE PRESIDENT VANCE: No, Margaret, prices are going to come down, but it's going to take a little bit of time, right?

The president has been president for all of five days. I think that in those five days, he's accomplished more than Joe Biden did in four years. It's been an incredible breakneck pace of activity. We're going to work with Congress. We're of course going to have more executive orders, and we're going to try- the way that you- you lower prices is that you encourage more capital investment into our country, and you asked specifically what executive order is going to help lower prices.

All of the stuff that we've done on energy, to explore more energy reserves, to develop more energy resources in the United States of America. One of the main drivers of increased prices under the Biden Administration is that we had a massive increase in energy prices. Donald Trump has already taken multiple executive actions that are going to lower energy prices, and I do believe that means consumers are going to see lower prices at the pump and at the grocery store, but it's going to take a little bit of time. Rome wasn't built in a day--

[extended crosstalk]…

MARGARET BRENNAN: No, but all the things you experience at the grocery store are what people touch and feel. That's what- you were talking about bacon on the campaign trail.

VICE PRESIDENT VANCE: Of course, of course.

MARGARET BRENNAN: Those things- when do consumers actually get to touch and feel a difference in their lives?

VICE PRESIDENT VANCE: Well, but Margaret, how does bacon get to the grocery store? It comes on trucks that are fueled by diesel fuel. If the diesel is way too expensive, the bacon is going to become more expensive. How do we grow the bacon? Our farmers need energy to produce it. So if we lower energy prices, we are going to see lower prices for consumers, and that is what we're trying to fight for.

MARGARET BRENNAN: Well, the flurry of executive orders, most of them weren't about the economy. Many of them--

VICE PRESIDENT VANCE: Many of them were, though, Margaret. We had- I think we've taken over--

MARGARET BRENNAN: --You had a promise of tariffs by February 1.

VICE PRESIDENT VANCE: --We've taken over 200 executive actions, some executive orders, other executive actions. Again, this is in less than a week, and a lot of them were focused on the economy, bringing investment into our country and lowering energy prices. …”

Transcript: Vice President JD Vance on "Face the Nation with Margaret Brennan," Jan. 26, 2025

The following is the full transcript of an interview with Vice President JD Vance on "Face the Nation with Margaret Brennan" that aired on Jan. 26, 2025.

www.cbsnews.com

 

[Mulberry Heel]

“… MARGARET BRENNAN: You campaigned on lowering prices for consumers. We've seen all of these executive orders. Which one lowers prices?

VICE PRESIDENT VANCE: Well, first of all, we have done a lot, and there have been a number of executive orders that have caused, already, jobs to start coming back into our country, which is a core part of lowering prices. More capital investment, more job creation in our economy, is one of the things that's going to drive down prices for all consumers, but also raise wages so that people can afford to buy the things that they need. If you look at our slate of executive orders--

MARGARET BRENNAN: So, grocery prices aren't going to come down?

VICE PRESIDENT VANCE: No, Margaret, prices are going to come down, but it's going to take a little bit of time, right?

The president has been president for all of five days. I think that in those five days, he's accomplished more than Joe Biden did in four years. It's been an incredible breakneck pace of activity. We're going to work with Congress. We're of course going to have more executive orders, and we're going to try- the way that you- you lower prices is that you encourage more capital investment into our country, and you asked specifically what executive order is going to help lower prices.

All of the stuff that we've done on energy, to explore more energy reserves, to develop more energy resources in the United States of America. One of the main drivers of increased prices under the Biden Administration is that we had a massive increase in energy prices. Donald Trump has already taken multiple executive actions that are going to lower energy prices, and I do believe that means consumers are going to see lower prices at the pump and at the grocery store, but it's going to take a little bit of time. Rome wasn't built in a day--

[extended crosstalk]…

MARGARET BRENNAN: No, but all the things you experience at the grocery store are what people touch and feel. That's what- you were talking about bacon on the campaign trail.

VICE PRESIDENT VANCE: Of course, of course.

MARGARET BRENNAN: Those things- when do consumers actually get to touch and feel a difference in their lives?

VICE PRESIDENT VANCE: Well, but Margaret, how does bacon get to the grocery store? It comes on trucks that are fueled by diesel fuel. If the diesel is way too expensive, the bacon is going to become more expensive. How do we grow the bacon? Our farmers need energy to produce it. So if we lower energy prices, we are going to see lower prices for consumers, and that is what we're trying to fight for.

MARGARET BRENNAN: Well, the flurry of executive orders, most of them weren't about the economy. Many of them--

VICE PRESIDENT VANCE: Many of them were, though, Margaret. We had- I think we've taken over--

MARGARET BRENNAN: --You had a promise of tariffs by February 1.

VICE PRESIDENT VANCE: --We've taken over 200 executive actions, some executive orders, other executive actions. Again, this is in less than a week, and a lot of them were focused on the economy, bringing investment into our country and lowering energy prices. …”

Transcript: Vice President JD Vance on "Face the Nation with Margaret Brennan," Jan. 26, 2025

The following is the full transcript of an interview with Vice President JD Vance on "Face the Nation with Margaret Brennan" that aired on Jan. 26, 2025.

www.cbsnews.com

Those executive orders weren't mainly focused on the economy because the economy is actually doing well and the truth - as guys like Vance know well - is that Trumpers didn't vote for him because of inflation or high prices. They voted for him because of culture war issues, which is why most of Trump's executive orders were about that, not the economy. His supporters are willing to pay more for eggs as long as they see transgenders being harmed and DEI "wokeness" being rolled back at the federal level. Of course Vance won't publicly admit to that, but he knows it's true.

 

[StrangePackage]

Those executive orders weren't mainly focused on the economy because the economy is actually doing well and the truth - as guys like Vance know well - is that Trumpers didn't vote for him because of inflation or high prices. They voted for him because of culture war issues, which is why most of Trump's executive orders were about that, not the economy. His supporters are willing to pay more for eggs as long as they see transgenders being harmed and DEI "wokeness" being rolled back at the federal level. Of course Vance won't publicly admit to that, but he knows it's true.

There's two parts to this.

First is that there are two kinds of economy - there's the macro county/world economy, which is humming along, and the household wallet economy, which is not. Trump spoke to this, Kamala didn't. That was a big problem.

Second is that while Trump's core supporters absolutely are not "economically anxious" enough people voted for him based on his lies about improving the household wallet economy to give him the presidency. And those folks are going to learn the hard way what believing his lies costs.

 

[lawtig02]

There's two parts to this.

First is that there are two kinds of economy - there's the macro county/world economy, which is humming along, and the household wallet economy, which is not. Trump spoke to this, Kamala didn't. That was a big problem.

Second is that while Trump's core supporters absolutely are not "economically anxious" enough people voted for him based on his lies about improving the household wallet economy to give him the presidency. And that folks are going to learn the hard way what believing his lies costs.

You could also carve out the commodity economy, which can be impacted by any number of unique factors. For eggs, it’s mainly bird flu right now. But having listened to Pubs blame commodity fluctuations on Biden over the last four years, I’m more than happy to hang my $12 omelette around Trump’s neck.

 

[JCTarheel82]

You could also carve out the commodity economy, which can be impacted by any number of unique factors. For eggs, it’s mainly bird flu right now. But having listened to Pubs blame commodity fluctuations on Biden over the last four years, I’m more than happy to hang my $12 omelette around Trump’s neck.

This. The tragically economically illiterate American electorate directly blamed the Biden admin for any and all economic hardships without consideration for nuance and exogenous factors. The same standard has to be applied to Trump.