(What’s Left of) Our Economy: Inflation Finally Starts to Look Tariff-y
Law enforcement shouldn't be political.
Critics of Trump-onomics and tariffs in particular had their turn to eat some crow today – as the Commerce Department reported that economic growth in the fourth quarter was much weaker than expected and inflation had warmed up (see here and here) and as the Supreme Court ruled against the President’s emergency tariffs.
Since I’ll need some time to go over the Supreme Court decision, and the inflation figures are somewhat timelier than the growth figures, I’ll focus on the latter today.
And according to the new official report, they showed not only a pick up in the inflation measure favored by the Federal Reserve (the U.S. government agency mainly responsible for fighting price hikes), but a definite Trump tariff effect.
As the new headline figures showed, on a monthly basis the “Price Indexes for Personal Consumption Expenditures” (PCE) inflation read actually doubled between November and December – from 0.2 percent to 0.4 percent. And that means that it’s exactly where it stood last February – the first full month of the president’s second term. Below are the specifics.
February 0.4 percent
March 0.0 percent
April 0.2 percent
May 0.2 percent
June 0.3 percent
July 0.2 percent
August 0.3 percent
September 0.3 percent
October 0.2 percent
November 0.2 percent
December 0.4 percent
Headline PCE inflation on a yearly basis quickened, too, though not as fast (from 2.8 percent to 2.9 percent). So as the below figures make clear, it’s higher than the 2.7 percent in that first Trup 2.0 month.
February 2.7 percent
March 2.3 percent
April 2.2 percent
May 2.4 percent
June 2.6 percent
July 2.6 percent
August 2.7 percent
September 2.8 percent
October 2.7 percent
November 2.8 percent
December 2.9 percent
On a February-December basis (covering the first Trump 2.0 months), figures look better. During those months in 2024, headline PCE was up 2.25 percent – not much worse than the two percent rate the Fed has set as its target. During the final ten months of the pre-tariff-y Biden administration, it rose by 1.96 percent. And the gap between those Biden and Trump figures narrowed since November, when it was reported as 1.66 percent versus 2.06 percent)
When it comes to headline PCE, more tariff-driven inflation evidence appears in the months since President Trump began imposing his “Liberation Day” tariffs (last April). Between April and December, 2025, this measure of inflation increased by 2.08 percent. During the corresponding pre-tariff Biden 2024 months, its rate was just 1.34 percent. And the Biden-Trump gap widened since November, when it was reported as 1.54 percent versus 1.05 percent.
Core PCE, as known by RealityChek readers, strips out energy and food prices because they’re supposedly volatile for reasons largely unrelated to the …
Law enforcement shouldn't be political.
Critics of Trump-onomics and tariffs in particular had their turn to eat some crow today – as the Commerce Department reported that economic growth in the fourth quarter was much weaker than expected and inflation had warmed up (see here and here) and as the Supreme Court ruled against the President’s emergency tariffs.
Since I’ll need some time to go over the Supreme Court decision, and the inflation figures are somewhat timelier than the growth figures, I’ll focus on the latter today.
And according to the new official report, they showed not only a pick up in the inflation measure favored by the Federal Reserve (the U.S. government agency mainly responsible for fighting price hikes), but a definite Trump tariff effect.
As the new headline figures showed, on a monthly basis the “Price Indexes for Personal Consumption Expenditures” (PCE) inflation read actually doubled between November and December – from 0.2 percent to 0.4 percent. And that means that it’s exactly where it stood last February – the first full month of the president’s second term. Below are the specifics.
February 0.4 percent
March 0.0 percent
April 0.2 percent
May 0.2 percent
June 0.3 percent
July 0.2 percent
August 0.3 percent
September 0.3 percent
October 0.2 percent
November 0.2 percent
December 0.4 percent
Headline PCE inflation on a yearly basis quickened, too, though not as fast (from 2.8 percent to 2.9 percent). So as the below figures make clear, it’s higher than the 2.7 percent in that first Trup 2.0 month.
February 2.7 percent
March 2.3 percent
April 2.2 percent
May 2.4 percent
June 2.6 percent
July 2.6 percent
August 2.7 percent
September 2.8 percent
October 2.7 percent
November 2.8 percent
December 2.9 percent
On a February-December basis (covering the first Trump 2.0 months), figures look better. During those months in 2024, headline PCE was up 2.25 percent – not much worse than the two percent rate the Fed has set as its target. During the final ten months of the pre-tariff-y Biden administration, it rose by 1.96 percent. And the gap between those Biden and Trump figures narrowed since November, when it was reported as 1.66 percent versus 2.06 percent)
When it comes to headline PCE, more tariff-driven inflation evidence appears in the months since President Trump began imposing his “Liberation Day” tariffs (last April). Between April and December, 2025, this measure of inflation increased by 2.08 percent. During the corresponding pre-tariff Biden 2024 months, its rate was just 1.34 percent. And the Biden-Trump gap widened since November, when it was reported as 1.54 percent versus 1.05 percent.
Core PCE, as known by RealityChek readers, strips out energy and food prices because they’re supposedly volatile for reasons largely unrelated to the …
(What’s Left of) Our Economy: Inflation Finally Starts to Look Tariff-y
Law enforcement shouldn't be political.
Critics of Trump-onomics and tariffs in particular had their turn to eat some crow today – as the Commerce Department reported that economic growth in the fourth quarter was much weaker than expected and inflation had warmed up (see here and here) and as the Supreme Court ruled against the President’s emergency tariffs.
Since I’ll need some time to go over the Supreme Court decision, and the inflation figures are somewhat timelier than the growth figures, I’ll focus on the latter today.
And according to the new official report, they showed not only a pick up in the inflation measure favored by the Federal Reserve (the U.S. government agency mainly responsible for fighting price hikes), but a definite Trump tariff effect.
As the new headline figures showed, on a monthly basis the “Price Indexes for Personal Consumption Expenditures” (PCE) inflation read actually doubled between November and December – from 0.2 percent to 0.4 percent. And that means that it’s exactly where it stood last February – the first full month of the president’s second term. Below are the specifics.
February 0.4 percent
March 0.0 percent
April 0.2 percent
May 0.2 percent
June 0.3 percent
July 0.2 percent
August 0.3 percent
September 0.3 percent
October 0.2 percent
November 0.2 percent
December 0.4 percent
Headline PCE inflation on a yearly basis quickened, too, though not as fast (from 2.8 percent to 2.9 percent). So as the below figures make clear, it’s higher than the 2.7 percent in that first Trup 2.0 month.
February 2.7 percent
March 2.3 percent
April 2.2 percent
May 2.4 percent
June 2.6 percent
July 2.6 percent
August 2.7 percent
September 2.8 percent
October 2.7 percent
November 2.8 percent
December 2.9 percent
On a February-December basis (covering the first Trump 2.0 months), figures look better. During those months in 2024, headline PCE was up 2.25 percent – not much worse than the two percent rate the Fed has set as its target. During the final ten months of the pre-tariff-y Biden administration, it rose by 1.96 percent. And the gap between those Biden and Trump figures narrowed since November, when it was reported as 1.66 percent versus 2.06 percent)
When it comes to headline PCE, more tariff-driven inflation evidence appears in the months since President Trump began imposing his “Liberation Day” tariffs (last April). Between April and December, 2025, this measure of inflation increased by 2.08 percent. During the corresponding pre-tariff Biden 2024 months, its rate was just 1.34 percent. And the Biden-Trump gap widened since November, when it was reported as 1.54 percent versus 1.05 percent.
Core PCE, as known by RealityChek readers, strips out energy and food prices because they’re supposedly volatile for reasons largely unrelated to the …
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