The 2025 Inflation and Recession Watch

1. 86

   My Esotericposted 2 months ago

   Thought it was about time to devote a forum to just likely outcome of Trump's so-called Bold Agenda, you know, the one that is taking America down with it.
   
   There are several parts of his "agenda" that will likely cause inflation and recession. The two biggest are his draconian immigration policies which are destroying the lives of millions of immigrants and citizens alike and the TACO tariff program.
   
   How will this happen?
   
   On the immigration side, Trump plans to reduce our workforce by about 2.4% once he deports all the citizens and non-citizens he wants.
   
   Recession can occur from the loss of demand from the 4 million+ no longer buying things in the US (plus lower demand from another 2 million or so workers who lost jobs because businesses went bust due to lack of labor).
   
   Inflation can occur from lower supply due to lower economic activity.
   
   On the tariff side, inflation is a mathematical certainty. The only question is how much. You cannot make things more expensive to produce or purchase without driving inflation.
   
   Recession and easily follow from lower supply as businesses fold under reduced demand and higher costs. It is expected that if Trump gets his way, GDP will decrease by 1% to 2.6%.
   
   We are seeing this in real time now.
   
   * For the first 6 months of Trump's term, GDP grew at a measly 1.23%. And this is before his higher tariffs take effect on Aug 8 (his latest "deadline").
   
   * PCE, the Feds inflation gauge, had been getting very close to its target of 2% as Biden left office. But it reversed course when Trump took over. Core (the less volatile) PCE was 2.8% at the end of 2024. It dropped to 2.6% by the end of Jan 2025. It was back up to 2.8% in June 2025 and projected to be the same in July.
   
   * Other CPI measures are more worrisome and can be gotten into latter
   
   * The July labor report was a bombshell of bad news since it showed an almost stalled labor market in its May and June revisions, and an anemic 83,000 in July.
   
   * Unemployment ticked up t0 4.2% while the Labor Force Participation Rate is down to 62.2%, the lowest since 2022. One of the reasons for the declining rate is the lower participation of foreign-born workers - 341,000 fewer in the latest measure.
   
   * The chances of recession are down overall but range between 30% to 50% depending on who you ask. There is one outlier, and AI-based model, that has the chance of recession by year end at 71%.
   
   
   Clearly, things are not going in the direction that MAUGA thought it would when they voted for Trump.

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2. 86

   My Esotericposted 2 months ago

   HOT OFF THE PRESS, sort of.
   
   Trump wants inflation to increase fast now.
   
   You’re absolutely right — the de minimis exception, which had already been phased out for Chinese and Hong Kong shipments earlier in 2025, was officially voided globally by President Trump.
   
   What Changed — Explained
   
   1. Initial Suspension for China/Hong Kong
   On May 2, 2025, Trump revoked the de minimis duty-free exemption specifically for goods from China and Hong Kong, requiring tariffs up to 145% or flat fees on postal shipments.
   
   2. Full Global Suspension
   On July 30, 2025, Trump signed an executive order expanding the suspension to all countries. This order removes duty-free entry for any shipment ≤ $800, effective August 29, 2025.
   
   Non-postal imports will be treated like standard entries (full tariffs, documentation). Postal shipments will temporarily face flat duties ($80–$200/item) before transitioning to ad-valorem tariffs.
   
   3. Earlier Legal Mandate to End De Minimis in 2027
   The One Big Beautiful Bill Act, signed on July 4, 2025, legally repeals the statutory de minimis exemption effective July 1, 2027. But the executive order accelerates that timetable.
   
   Why It Matters
   
   Government Reasoning
   The administration cited [FAKE] national security concerns, arguing that the exemption was exploited to traffic illicit substances like fentanyl, and to evade tariffs.
   
   Economic & Trade Impact
   Over 90% of U.S. cargo formerly qualified as de minimis, underscoring the vast scale of shipments affected.
   
   Platforms like Shein and Temu, and small businesses on Etsy, eBay, relied heavily on this exemption—now they will face steep cost increases.
   
   The Information Technology and Innovation Foundation (ITIF) warns the new policy will sharply reduce access to affordable cross-border e-commerce and strain customs infrastructure.
   
   This is possibly another TACO maneuver by Trump.
   
   https://www.cnn.com/2025/08/03/business … temu-shein

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   1. 86

      My Esotericposted 2 months agoin reply to this

      I looked deeper into this. If I read it correctly, this will shut down Amazon, Temu, Shein.  Why? Because the duty is per "item" being purchased.
      
      Example
      Let’s say you order three different products from Vietnam (a country facing a 20% U.S. tariff):
      
      You would be charged:
      
      3 items × $160 = $480 in duties, likely passed on by the merchant or shipper.
      
      If those same three items came from France (with <16% average tariffs):
      
      3 items × $80 = $240 in duties.
      
      If it comes from a country with a >25% tariff, then the duty is $200 per item, so in the example above, the cost would be 3 x $200 = $600 added on to what ever item you bought!!.
      
      Do you really think the seller is going to eat those costs or the buyer pay them?  I don't think so, they will simply go out of business and Americans will simply do without.

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3. 86

   My Esotericposted 2 months ago

   My wife just paid $8.49 for a jar of mayonnaise that use to cost a little over $6. Likewise, she just paid $6 and change for a bottle catsup that used to cost a little over $4.

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4. 73

   Kathleen Cochranposted 2 months ago

   I just paid $5 for a small shake at DQ.
   
   Recessions are good for the rich.

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   1. 86

      My Esotericposted 2 months agoin reply to this

      They can be, unless they are big ones like the Great Recession or Great Depression.
      
      Bush's recession actually reduced inequality a smidgeon. But it took the Great Depression (made worse by a Trump tariff look-a-like) and WW II bring income and wealth inequality down to something that was reasonable.
      
      Unfortunately, all those gains are long gone.

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5. 86

   My Esotericposted 3 weeks ago

   I spent the last week, with the help of ChatGPT, working on a set of composite indices to give us an idea of where Trump's economy is headed. I started with one combined index, but that didn't fit with reality over the long-term (back to 1990). I ended up with a set of three - one (Temperature-10) to measure the current temperature, another (Baro-10) to give us a since of where we are and where we are headed, and a third (Baro-L) to look further out in time. Each index is a composite of 10 other indices reported by FRED.
   
   Everything is normalized to a 0 - 100 scale where 50 is neutral, 0 is terrible and 100 is great.
   
   Taken together, they map pretty much the real world, at least since 1990.
   
   Here is what it is telling us from Feb to Sep (with Sep being squishy because not all the various reports are in)
   
   TEMP-10:
   * Feb–Jul: decent but not hot (71–78).
   
   * Sharp drop Aug–Sep to 57.9 → 56.7
   
   * Takeaway: the slowdown arrived in the coincident data in late Q3.
   
   BARO-10:
   * Feb–Jul: strong (low–mid 80s).
   
   * Aug–Sep: clear cooling to 77.7 → 72.3
   
   * Takeaway: momentum was robust through midsummer, then softened—but still above neutral (50).
   
   BARO-L:
   * Early warning dip May–Jun to 65–67 (z 0.05–0.10) → rebound in Jul to 81.5, then eases to 69–74 by Sep.
   
   * Takeaway: signaled a soft patch ~2–3 months before the others (May–Jun), flashed a brief improvement in July, and now points to sub-trend conditions (60s–low 70s).
   
   CONCLUSION:
   * None of the 0–100 series broke 50 to the downside yet. So this reads as a slowdown/soft patch, not a recession-style contraction.
   
   * If Baro-L drifts <60 and Thermometer keeps sliding toward 50, risk for recession would increase.
   
   If anyone wants a list of the sub-indexes, just ask. I think inflation comes out today, so I will run it again when it does.

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   1. 61

      Willowarborposted 3 weeks agoin reply to this

      Overall CPI: Rose 0.4% in August on a seasonally adjusted basis, an acceleration from the 0.2% increase in July. Over the last 12 months, the all-items index increased by 2.9%.
      
      Core CPI: Remained steady at 3.1% annually, unchanged from July and matching market expectations. On a monthly basis, the core index (excluding volatile food and energy costs) increased by 0.3%, the same pace as the previous month.
      
      Key drivers: The increase in August was primarily driven by shelter costs, which rose 0.4%, as well as increases in food and gasoline prices.
      
      And Trump has been blathering (LYING) for months how we have no inflation...
      
      Waiting for Maga to say how pleased they are with this...

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      1. 86

         My Esotericposted 3 weeks agoin reply to this

         I have added the new information into my model and will rerun it tonight to see what happens.

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         1. 86

            My Esotericposted 3 weeks agoin reply to this

            I reran it and as expected, it pointed to a worsening situation.

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6. 86

   My Esotericposted 3 weeks ago

   Joke for the day:
   
   "Trump just said he solved inflation. But prices are rising - in part because of his policies"
   
   Here is another Trump lie for MAUGA to repeat - "President Donald Trump declared on Friday that he’s “already solved inflation” and that “costs are down.”
   
   https://www.cnn.com/2025/09/12/business … p-policies
   
   But here is what IS TRUE - "Coffee prices haven’t surged this much in decades"
   
   https://www.cnn.com/2025/09/12/food/coffee-prices
   
   Speaking of coffee prices - my wife buys the Keurig pods, pack of 10, has gone up from $6.99 to $8.99 from Southeast Grocers. She has seen them at $10.99 elsewhere.

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7. 86

   My Esotericposted 2 weeks ago

   Another sign of impending recession - CREDIT SCORES DROPPING
   
   https://www.cnn.com/2025/09/16/economy/ … dent-loans

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8. 86

   My Esotericposted 2 weeks ago

   Consumers keep spending when everything says they shouldn't be. That is making me think this may be a 2006 housing bubble-type phenomenon - when reality catches up with the pocketbook, disaster is not far behind.
   
   Just like with the stock market's artificially high levels. All economic indicators say it should be falling, BUT, because the economy is so weak, investors are counting on the Fed to lower interest rates (I think today) so they are giddy at the thought.
   
   https://www.cnn.com/2025/09/16/economy/ … es-august.

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9. 86

   My Esotericposted 2 weeks ago

   Trump is killing our farmers. Just ask them.
   
   https://www.cnn.com/2025/09/15/politics … terrorists

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10. 86

    My Esotericposted 2 weeks ago

    Weekly Update (AI) to Trump ending the de minimis exemption.
    
    Short answer: it’s early, but the end of de minimis is starting to show up in shipping costs, retail pricing, carrier volumes, and logistics. Any CPI effect so far looks small and hard to isolate, but forecasters expect some upward pressure on goods prices into the holidays.
    
    Inflation (so far)
    
    * There’s no clean CPI “de minimis line item,” and August CPI didn’t show a discrete jump tied to it. Analysts say tariff changes should add modest upward pressure to core goods over the next few months; think a slow pass-through rather than a spike.
    [The Conference Board]
    
    Prices & retail behavior
    
    * Cross-border DTC players (e.g., Temu/Shein) are raising prices/cutting promos as formerly duty-free items now carry duties; mainstream brands flagged margin headwinds from higher tariff exposure.
    [MarketWatch]
    
    * Expect the biggest retail effects in apparel, small household goods, accessories, and low-ticket electronics—the categories most reliant on small direct imports. (Inference based on the mix described by Reuters.)
    [Reuters]
    
    Carriers & logistics
    
    * FedEx guided a ~$170M profit hit this quarter tied to newly tariffed parcels; UPS volumes are under pressure too.
    [Reuters]
    
    * Postal traffic into the U.S. dropped sharply right after the change (UPU said >80%), as foreign posts paused or retooled services; some are gradually resuming.
    [DC Velocity]
    
    * CBP flipped the switches in ACE: Type 86 and Section 321 parcel clearances are being rejected, and entries now need formal/informal filings with duty payment (with a temporary flat-duty option in the transition).
    [GovDelivery, Expeditors]
    
    Government revenue / volumes
    
    * Since earlier limits on China/HK and now the global end on Aug 29, 2025, CBP reports hundreds of millions of dollars in added duties (>$492M cited for the China/HK tranche alone). More global revenue data should post in the coming weeks.
    [Reuters]
    
    Consumer side-effects
    
    * Confusion around new duties has brought a rise in duty-payment phishing/scams; consumer advisories are circulating ahead of holiday shopping.
    [Business Insider]
    
    Bottom line
    
    * Inflation: any CPI impact to date is muted and hard to disentangle, but some pass-through to goods prices is likely over the next 1–2 months as retailers/carriers normalize.
    [The Conference Board]
    
    * Operational/price effects: clearly visible already—higher delivered prices, carrier costs, postal slowdowns, more paperwork, and added duties collected.
    [Reuters, DC Velocity]

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11. 81

    Readmikenowposted 2 weeks ago

    I believe things will change when the Fed lowers the interest rate.
    
    This will make it easier for businesses to borrow money, people to borrow money for housing, etc.
    
    Thing will change for the better when this happens.

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    1. 86

       My Esotericposted 2 weeks agoin reply to this

       The Fed lowered interest rates, but only because the economy is failing.
       
       Problem is, in Fed-speak, we are at the front-end of a Reagan-style Stagflation cycle. It won't end until these draconian tariffs are removed.

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12. 86

    My Esotericposted 2 weeks ago

    By design of the Conservatives, the top 20% of income earners are now responsible for 63% of consumer spending (the top 10% spends 49%). The income gap is that large. Anyway, if, for whatever reason, the very wealthy decide to even slow down spending - recession here we come.
    
    https://www.cnn.com/2025/09/18/business … y-spending

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13. 86

    My Esotericposted 2 weeks ago

    With the rate cut, the Fed is telling us we are in the beginning stages of a Reaganesque stagflation cycle.
    
    Here is an Econ 101 truism - if there is a shock to Demand (think the pandemic) then only inflation OR unemployment go up. If there is a shock to Supply (think tariffs) then BOTH inflation and unemployment go up. When Both go up, that is stagflation.
    
    https://www.cnn.com/2025/09/17/economy/ … ting-final

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14. 86

    My Esotericposted 2 weeks ago

    This is from Van Jones and represents the Charlie Kirk I am aware of:
    
    "The day before he was horrifically murdered, Charlie Kirk sent me a direct message on X.
    
    He and I had been sparring publicly over the killing of a Ukrainian refugee and its relationship to race.
    
    He said the gruesome killing of a White woman by a Black man was motivated solely by anti-White hatred. I denounced those comments on CNN as unfounded. He went on TV and denounced MY denunciation. Then he unleashed a firehose of tweets, challenging my argument.
    
    Kirk’s pushback sparked an online torrent of racist death threats against me, the likes of which I have rarely seen." - It is this threat of violence that Robinson may have been afraid of. I know it is what the gay guy in my office is afraid of - a right-wing Robinson coming to kill him for being gay simply because that is what Kirk verbally insinuates.
    
    Van Jones then goes on to relate that Kirk invited him on his show to debate (who do you take the side of racists, but Kirk was going to try).
    
    Van Jones then spends the rest of his piece arguing for the more peaceful path that Kirk offered him rather than the one Robinson took (out of fear, in my opinin) or the one Kirk's supporters want to take.
    
    https://www.cnn.com/2025/09/19/politics … rk-message
    .

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15. 86

    My Esotericposted 2 weeks ago

    I spent the last week or so refining a set of composite economic indices to measure different aspects of the economy using ChatGPT (it would have taken me a month or better back in the day when I did this sort of thing professionally).
    
    The data used is from FRED and goes back to 1990. I had a back-casting analysis run which concluded the set of indices and weights assigned did a very good job of tracking the economy historically.
    
    Here is an explanation of the chart attached chart which captures the last five years.
    
    How to read this chart
    
    The dashed line at 50 is the long-run average (1990 - 2023). Above 50 = better-than-normal; below 50 = softer-than-normal.
    
    * Blue (Barometer-10): a balanced index of labor, finance, prices, and output — think “overall conditions.”
    
    * Orange (Thermometer-10): a more current read on activity — think “right now.”
    
    * Green (Barometer-L): a leading read — tends to move a few months before the economy does.
    
    What it’s saying now
    
    * At the moment, the overall outlook is soft. The orange Thermometer has slipped to well below 50, signaling cooler-than-normal momentum in the latest data.
    
    * Overall conditions are OK but wobbly. The blue Barometer-10 is a touch above 50, so not recessionary, but it’s been choppy — consistent with a fragile expansion.
    
    * The next few months look better than the last few. The green Barometer-L has turned up and above 50, which historically points to firmer activity 3–6 months ahead if the lead holds.
    
    Why the lines can disagree
    
    * Different parts of the economy turn at different times. Leading pieces (credit conditions, jobless claims, housing-related signals) can improve before coincident pieces (spending, production) show it. A short-term shock (oil spike, credit event, policy surprise) could still flip the picture — but absent a shock, the lead index argues against a deep immediate downturn.
    
    Bottom line
    
    * Near-term: soft patch, below average.
    
    * Baseline: still an expansion, not a clear recession signal.
    
    * Outlook: improving odds of stabilization if nothing happens like increasing inflation.
    
    Notes: These indices blend widely used data; they get revised as official numbers are updated. No single chart is perfect — use this as a dashboard gauge, not a guarantee.
    
    
    If there are any nerds out there, I can supply the indices currently being used upon request.
    
    Also, I will run it again at the EOM after the next set of data has dropped.

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16. 84

    Sharlee01posted 2 weeks ago

    Federal Reserve Bank of Philadelphia
    Third Quarter 2025 Survey of Professional Forecasters
    
    Forecasters See Higher Growth in 2025
    The near-term outlook for growth in the U.S. economy looks better now than it did three months ago, according to 36 forecasters surveyed by the Federal Reserve Bank of Philadelphia. The forecasters expect real GDP to grow at an annual rate of 1.3 percent this quarter, up from the previous estimate of 0.9 percent. On an annual-average over annual-average basis, the forecasters expect real GDP to increase 1.7 percent in 2025, up 0.3 percentage point from the estimate in the survey of three months ago.
    
    A slight downward revision to the path for the unemployment rate accompanies the outlook for growth. The unemployment rate is projected to be an annual average of 4.2 percent in 2025 and 4.5 percent in 2026 before falling to 4.4 percent in 2027, and 4.3 percent in 2028. In the previous survey, the unemployment rate was forecast to rise from 4.3 percent to 4.4 percent over the same four-year period.
    
    On the employment front, the forecasters predict job gains in the current quarter at a rate of 73,000 per month. The employment projections for both the current quarter and the following three quarters show downward revisions from those of the previous survey. The projections for the annual-average level of nonfarm payroll employment suggest job gains at a monthly rate of 132,800 in 2025, down from the previous estimate of 140,900. (These annual-average projections are computed as the year-to-year change in the annual-average level of nonfarm payroll employment, converted to a monthly rate.)
    
    Lots of positive news, more to read
    
    https://www.philadelphiafed.org/surveys … hatgpt.com

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    1. 86

       My Esotericposted 2 weeks agoin reply to this

       That seems to line up pretty well with and helps validate my work, but with these notes:
       
       To summarize what they’re saying
       
       * Growth: nowcast for Q3 real GDP of = ~1.3%  and 2025 ≈ 1.7% is better than their last survey, but still modest. Remember, Trump wants >3% or 4% territory.
       
       * Jobs: payroll growth was revised down versus three months ago - 73k/month current quarter compared to 133k/month for 2025.
       
       * Unemployment: ~4.2% in 2025, drifting UP to ~4.3%–4.5% later
       
       How that lines up with my indices (AI generated)?
       
       * Thermometer-10 (coincident) is under 50 → says current momentum is soft. That fits a 1.3% GDP quarter and slower monthly job gains.
       
       * Barometer-10 (overall conditions) is a bit above 50 → fragile expansion, not a recession call. That’s broadly consistent with 1.7% 2025 growth.
       
       * Barometer-L (leading) has turned up, historically pointing to a firmer 3–6 month outlook which agrees with the SPF’s upgrade - but is subject to things like higher inflation, actual lower growth, and tariff turmoil.
       
       Both the SPF and my tool suggest the same thing at the moment, soft-landing coupled with slow growth.
       
       Their baseline looks like a soft-landing/slow-growth story.

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