Consumer Prices Defy Prediction that Tariffs Would Tax Consumers

U.S. consumer prices rose by less than expected in August, once again defying forecasts that a tight labor market, tariffs, and trade disputes would push inflation higher. The consumer-price index rose a seasonally adjusted 0.2 percent in August from the prior month, the Labor Department said Thursday. Core inflation, which excludes volatile food and energy components, increased 0.1 percent. Both were a tenth of a percentage point lower than the consensus forecast of economists. The small rise in core inflation was below the lowest range of forecasts from economists surveyed by Bloomberg. Compared with a year ago, prices were up 2.7 percent, lower than the 2.9 percent gain in July and June. Core inflation was up 2.2 percent from a year earlier, down from 2.4 percent in July. This means the pace of inflation has slowed. The lower than expected rise in consumer prices was foreshadowed by the Labor Department’s report on producer prices and the Federal Reserve’s Beige Book Wednesday. Taken together, the reports indicate that fears that trade disputes and rising tariffs were overstated. Commerce Secretary Wilbur Ross can once again claim vindication based on Thursday’s report. When President Donald Trump announced tariffs on steel and aluminum, Ross went on CNBC with cans of Campbell’s Soup and a can of beer and argued that the new duties would have minimal effects on consumer prices. Thursday’s report shows he was right. The price of soup fell in August 0.6 percent. (On a seasonally adjusted basis, however, soup prices rose 1.1 percent, which suggests that people don’t buy much soup in August.) For the year, the price of soup is up just 0.4 percent, far lower than overall prices, according to Labor Department data. The price of “beer at home” fell 0.1 percent and is up just 1.1 percent. But it is not just beer and soup that are disproving dire predictions of tariff-led inflation. The price of home appliances rose 0.3 percent on a seasonally adjusted basis in August, up 2.3 percent compared with a year ago. The price of major appliances fell 0.5 percent in August, indicating that earlier price pressures have fallen off. For the year, these are up 7.5 percent. This appears to be primarily due to the rise in the price of washing machines, which are subject to a separate anti-dumping tariff. Washing machine prices are up 13.6 for the year, although down 0.2 percent in August. Cars and trucks were another product where prices were expected to rise because of the metals tariffs. That has not happened. Price of new cars and trucks were flat for August and are up just 0.3 percent from a year ago. Tariffs are not causing prices on consumer technology to rise either, despite the Trump administration having levied tariffs on $50 billion of Chinese imports. Personal computer prices are down 4.4 percent for the year. Phone prices are down 4.9 percent. Television prices have fallen an astounding 18 percent. The price gains suggest the economy is expanding but is not facing any serious inflationary pressures due to trade. Despite recent slowdown in price gains, the Federal Reserve is still expected to raise rates for the third time this year later this month and again in December.

Bottom line..  All this hand-wringing by Dems, the liberal media, and to be fair..some Republicans about Trump’s tariffs, is all for nothing.  Trump’s economic strategy is vindicated once again.     🙂

Study: 20X as Many U.S. Jobs Created from Trump Tariffs than Jobs Lost

There are 20 times as many American jobs that have been created in the last six months thanks to President Trump’s tariffs on imported foreign goods than jobs that have been lost. Research by a Coalition for a Prosperous America (CPA) finds that the number of U.S. jobs gained because of Trump’s tariffs on imported steel, aluminum, solar panels, and washing machines exceeds the number of U.S. job losses because of the tariffs by a staggering 20-to-1 ratio. As Breitbart News reported, the CPA research has found that over the last six months, there have been about 11,100 U.S. jobs created due to Trump’s protective tariffs. On the other hand, there have been about 514 job losses directly tied to the tariffs. “We keep hearing stories about the sky falling because of President Trump’s strong hand in enforcing existing US trade laws,” CPA Chair Dan DiMicco, who worked on Trump’s transition team, said in a statement. “But the past six months have shown impressive job creation in skilled, high-wage sectors against only very negligible, accompanying job losses.” The most notable increases in job gains due to the tariffs were in the domestic steel and aluminum jobs. In the steel industry, alone, nearly 5,000 manufacturing jobs have been created. In the aluminum industry, a little less than 3,000 manufacturing jobs have been created thanks to Trump’s tariffs. Though Trump’s tariffs have been incredibly popular — specifically with American business owners, U.S. workers, and GOP voters — the Chamber of Commerce, free trade lawmakers, and the billionaire GOP donor Koch brothers have all attempted to stop the job-created tariffs. Since 2001, free trade with China has cost millions of Americans their jobs. Between 2001 and 2015, about 3.4 million U.S. jobs were lost due to the country’s trade deficit with China..

More great economic news!!  The Trump Administration really needs to promote this!!    🙂

China’s Economy Weakens as Trade Fight Heats Up, Emboldening Xi’s Critics

China’s ability to go toe to toe with the United States in the ongoing trade dispute was cast into doubt by economic data released this week showing an economy that had slowed down by far more than expected. Fixed income investment, which includes spending on machinery and infrastructure, rose 5.5 percent compared with a year ago, down from 6.0 percent in the prior month. Economists had expected 6.0 percent. It was the lowest level of fixed income investment growth since 1999, before China ascended to the World Trade Organization. Industrial production was up 6.0 percent, below the 6.3perrcent forecast. Unemployment rose to 5.1 percent last month, up from 4.8 percent in June. Retail sales annual gains were expected to rise from June’s 9.0 percent to 9.2 percent. Instead, sales fell to 8.8 percent.

Clearly China has FAR more to lose in this trade dispute than America does.  Maybe Trump’s tariffs strategy IS working after all..  For more, click on the text above.