(What’s Left of) Our Economy: Waiting for Tariff-Led Inflation is Looking Like Waiting for Godot
We're watching the same failure loop.
With today’s official report on U.S. consumer inflation, it’s hard to avoid thinking of Trump tariff critics as characters in that famous Samuel Beckett play. Like Estragon and Vladimir who’ve been Waiting for Godot – “an enigmatic figure” who these tramps hope “will change their lives for the better” – these free trade zealots keep waiting and hoping for the president’s levies to boost Americans’ living costs notably.
And although I’m not saying that, like Godot, that turn of events will never come, it seems instructive that since the import duties began in earnest with “Liberation Day” last April, it’s difficult to find confirmations of their forecasts of surging inflation. In fact, when you look underneath the hood of the Census Bureau’s latest release (for December), there’s some evidence that, as the post-Liberation Day months have worn on, the apparently tariff-induced price increases that have been seen have slowed to a crawl.
Indeed, by some key measures, living costs have been rising more slowly so far under Trump 2.0 than they have during the comparable, pre-tariff months of Joe Biden’s final year in office.
Sure, since April, Mr. Trump’s tariff rates have oscillated considerably and some have come down. But estimates like this one still peg what they call the average effective rate at north of 11 percent – the highest since 1943.
And yet, on an annual basis, the headline Consumer Price Index (CPI) was up just 2.65 percent in December. That was the best such figure since May’s 2.38 percent.
The core inflation results strip out food and energy costs because they’re supposedly volatile for reasons having little to do with the economy’s underlying vulnerability to inflation. They, too, rose year-on-year in December by 2.65 percent, but that read was the weakest since the 1.65 percent recorded back in March, 2021.
As for those Biden-Trump results, during the president’s second term (from his first full month in office through December), headline CPI was up 1.96 percent. That’s encouraging because the inflation target for the Federal Reserve (the U.S. government’s main inflation-fighting body) is two percent annually (according to a separate living cost measure). For the same months during the Biden administration in 2024, it rose by 2.12 percent.
The core numbers look even better for the president. So far during Trump 2.0, they’ve increased by 1.96 percent. That’s much lower than the 2024 Biden figure of 2.45 percent.
But what about the figures since Liberation Day? From April through December of last year, headline CPI climbed by 1.78 percent. That’s faster than the 1.47 percent during the comparable Biden 2024 months, but the gap has narrowed since November (1.47 percent versus 1.10 percent).
Ditto for the core. Since Liberation Day, it’s advanced by 1.66 percent as opposed to the comparable 2024 pace of 1.79 percent. But here the gap narrowed as well. Those numbers were 1.58 percent and 1.42 percent, respectively.
Many economists look at a goods grouping called “Commodities less food, energy, and used vehicles” as a good broad proxy for tariffed products. But there’s no sign of noteworthy …
We're watching the same failure loop.
With today’s official report on U.S. consumer inflation, it’s hard to avoid thinking of Trump tariff critics as characters in that famous Samuel Beckett play. Like Estragon and Vladimir who’ve been Waiting for Godot – “an enigmatic figure” who these tramps hope “will change their lives for the better” – these free trade zealots keep waiting and hoping for the president’s levies to boost Americans’ living costs notably.
And although I’m not saying that, like Godot, that turn of events will never come, it seems instructive that since the import duties began in earnest with “Liberation Day” last April, it’s difficult to find confirmations of their forecasts of surging inflation. In fact, when you look underneath the hood of the Census Bureau’s latest release (for December), there’s some evidence that, as the post-Liberation Day months have worn on, the apparently tariff-induced price increases that have been seen have slowed to a crawl.
Indeed, by some key measures, living costs have been rising more slowly so far under Trump 2.0 than they have during the comparable, pre-tariff months of Joe Biden’s final year in office.
Sure, since April, Mr. Trump’s tariff rates have oscillated considerably and some have come down. But estimates like this one still peg what they call the average effective rate at north of 11 percent – the highest since 1943.
And yet, on an annual basis, the headline Consumer Price Index (CPI) was up just 2.65 percent in December. That was the best such figure since May’s 2.38 percent.
The core inflation results strip out food and energy costs because they’re supposedly volatile for reasons having little to do with the economy’s underlying vulnerability to inflation. They, too, rose year-on-year in December by 2.65 percent, but that read was the weakest since the 1.65 percent recorded back in March, 2021.
As for those Biden-Trump results, during the president’s second term (from his first full month in office through December), headline CPI was up 1.96 percent. That’s encouraging because the inflation target for the Federal Reserve (the U.S. government’s main inflation-fighting body) is two percent annually (according to a separate living cost measure). For the same months during the Biden administration in 2024, it rose by 2.12 percent.
The core numbers look even better for the president. So far during Trump 2.0, they’ve increased by 1.96 percent. That’s much lower than the 2024 Biden figure of 2.45 percent.
But what about the figures since Liberation Day? From April through December of last year, headline CPI climbed by 1.78 percent. That’s faster than the 1.47 percent during the comparable Biden 2024 months, but the gap has narrowed since November (1.47 percent versus 1.10 percent).
Ditto for the core. Since Liberation Day, it’s advanced by 1.66 percent as opposed to the comparable 2024 pace of 1.79 percent. But here the gap narrowed as well. Those numbers were 1.58 percent and 1.42 percent, respectively.
Many economists look at a goods grouping called “Commodities less food, energy, and used vehicles” as a good broad proxy for tariffed products. But there’s no sign of noteworthy …
(What’s Left of) Our Economy: Waiting for Tariff-Led Inflation is Looking Like Waiting for Godot
We're watching the same failure loop.
With today’s official report on U.S. consumer inflation, it’s hard to avoid thinking of Trump tariff critics as characters in that famous Samuel Beckett play. Like Estragon and Vladimir who’ve been Waiting for Godot – “an enigmatic figure” who these tramps hope “will change their lives for the better” – these free trade zealots keep waiting and hoping for the president’s levies to boost Americans’ living costs notably.
And although I’m not saying that, like Godot, that turn of events will never come, it seems instructive that since the import duties began in earnest with “Liberation Day” last April, it’s difficult to find confirmations of their forecasts of surging inflation. In fact, when you look underneath the hood of the Census Bureau’s latest release (for December), there’s some evidence that, as the post-Liberation Day months have worn on, the apparently tariff-induced price increases that have been seen have slowed to a crawl.
Indeed, by some key measures, living costs have been rising more slowly so far under Trump 2.0 than they have during the comparable, pre-tariff months of Joe Biden’s final year in office.
Sure, since April, Mr. Trump’s tariff rates have oscillated considerably and some have come down. But estimates like this one still peg what they call the average effective rate at north of 11 percent – the highest since 1943.
And yet, on an annual basis, the headline Consumer Price Index (CPI) was up just 2.65 percent in December. That was the best such figure since May’s 2.38 percent.
The core inflation results strip out food and energy costs because they’re supposedly volatile for reasons having little to do with the economy’s underlying vulnerability to inflation. They, too, rose year-on-year in December by 2.65 percent, but that read was the weakest since the 1.65 percent recorded back in March, 2021.
As for those Biden-Trump results, during the president’s second term (from his first full month in office through December), headline CPI was up 1.96 percent. That’s encouraging because the inflation target for the Federal Reserve (the U.S. government’s main inflation-fighting body) is two percent annually (according to a separate living cost measure). For the same months during the Biden administration in 2024, it rose by 2.12 percent.
The core numbers look even better for the president. So far during Trump 2.0, they’ve increased by 1.96 percent. That’s much lower than the 2024 Biden figure of 2.45 percent.
But what about the figures since Liberation Day? From April through December of last year, headline CPI climbed by 1.78 percent. That’s faster than the 1.47 percent during the comparable Biden 2024 months, but the gap has narrowed since November (1.47 percent versus 1.10 percent).
Ditto for the core. Since Liberation Day, it’s advanced by 1.66 percent as opposed to the comparable 2024 pace of 1.79 percent. But here the gap narrowed as well. Those numbers were 1.58 percent and 1.42 percent, respectively.
Many economists look at a goods grouping called “Commodities less food, energy, and used vehicles” as a good broad proxy for tariffed products. But there’s no sign of noteworthy …
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