Is Trump's Tariffs Going to Cause Inflation and Recessions.

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   My Esotericposted 13 days ago

   This topic deserves its own space.
   
   Most economists think Trump's chaotic. seat-of-the-pants Tariff War against the world WILL cause significant inflation and possibly a Major Recession. I'll start with this analysis that I posted elsewhere.
   
   Let's review the latest on inflation and it is not good news from Trump or the economy. I will be presenting the most common measures, but lesser known ones that the Fed find more important.
   
   * The Headline CPI increased from 2.4% in May to 2.7% in June which is 3.7% annualized.  After 3 months of increases, this means Inflation is accelerating again.
   
   * The Core CPI, stripping out some volatile elements, increased from 2.8% in May to 2.9% in June. This is still pretty stable even though it is increasing. However, looking at a smaller subset of items, you will see a different story.
   
   * The Core PCE, followed by the Fed, rose from 2.7% in May to 2.8% in June. This metric has increased three-months running, which is why Powell won't cut interest rates.
   
   * The Trimmed-Mean CPI is one of those specialized metrics the Fed looks hard at and it increased dramatically from 2.22% (annualized) in May to an astounding 3.9% (annualized) in June! Beyond removing Food and Energy which the Core CPI does, this measure removes the top AND bottom 8% items leaving the central part of the basket. This jump shows an across the board increase in inflation. A terrible sign.
   
   * The Sticky CPI increased from 2.27% (annualized) in May to a whopping 4..28% (annualized) in June!! This metric measures things that change infrequently such as rent, medical services, and education. Sticky CPI rising at >3% YoY means inflation is embedded in essential, non-volatile sectors—not just headline spikes. Also, the increase indicates acceleration of inflation. Again, terrible news.
   
   Now the Good News
   
   * Both the Headline and Core PPI fell slightly from May to June. The PPI is what businesses pay and this suggests they are paying less in June. The PPI is also a leading indicator suggesting an flattening or lessening of future inflation. The caveats are that lower transportation and warehouse costs drove the decrease. Goods PPI is still increasing. Taken together, this indicates businesses may be eating rising costs trading small increases in consumer prices for smaller increases, or even losses, in profit margin. If businesses decide to protect their margins, then this will add to future inflation.
   
   You are Paying More For:
   
   * Apparel in June. After falling in April and May, it increased 4.9% (annualized) in June.
   
   * Appliances in June. Prices increased a lot in April and May but the June increase is 1.9% (a mind-blowing 23.9% (annualized)) for June.
   
   * Computers and stuff in June. Prices increased a lot in April and May but the June increase is 1.4% (a mind-blowing 18% (annualized)) for June.
   
   * Sporting goods: The pace of price hikes accelerated here, with the index rising 1.4% in June, up from 0.3% in May. The June increase is the largest in 18 months.
   
   * Tools, hardware and supplies: During much of 2023 and 2024, prices fell for this category. In June, prices rose 0.7%, marking the fifth-straight month of increases.
   
   * Toys: For the second month in a row, prices rose by 1.4%, a back-to-back jump only seen during periods of abnormally high inflation (2022, 1980). And more price hikes could be coming down the pike, Hasbro CEO told CNN’s Audie Cornish this week.
   
   Video equipment: Prices surged a record 4.5% /75% annualized) in June after rising 1% in May in this category that typically has seen more deflation than inflation since 1998, when the BLS started tracking it.
   
   Windows and floor coverings and other linens: After rising 0.3% from May to April, prices in this category surged 4.2% (about 73% annualized) higher in June, a record-high increase (BLS started tracking this category in early 1999). The US textile industry has shrunk considerably in recent decades, resulting in a high reliance on imported linens.
   
   As one person on this thread likes to put it - "why isn't Trump doing anything about this SKYROCETTING Inflation?

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      Credence2posted 12 days agoin reply to this

      I am waiting to see the result of all of this in the next COLA next August 13th, how long can he keep the lid on the results of his shortsightedness?

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         My Esotericposted 12 days agoin reply to this

         I am not aware of a COLA increase then, neither is ChatGPT.

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   My Esotericposted 8 days ago

   INFLATION UPDATE
   
   Beef prices SOARING, in part due to tariffs (or the threat of the). Other factors are shrinking herd size, more imported beef (although still small percentwise).
   
   Unlike eggs where you could point to the Avian Flu as the cause, beef inflation may be here to stay.
   
   https://www.cnn.com/2025/07/21/business … ecord-high

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