(What’s Left of) Our Economy: More (Pre-Iran and Pre-Supreme Court Ruling) Evidence that Tariffs Weren’t Fueling Much Overall Inflation
Law enforcement shouldn't be political.
More official U.S. economic reports came out today predating the Iran conflict and the Supreme Court’s decision striking down many of the Trump 2.0 tariffs – meaning that they provide almost no insights into how the economy will perform going forward. But they do represent more evidence on how the important experiment represented by Trumponomics, and these latest data were mixed.
The new downward revision to fourth quarter economic growth was stunning – and tougher to interpret than usual, given the uncertainties acknowledged by the Commerce Department in judging the effects of the October-through-mid-November government shutdown. More on that in a separate post.
But the new report on the inflation gauge favored by the Federal Reserve – the U.S. government’s main inflation-fighting agency – strengthened the case that, on the trade and tariff front, that Trumpian experiment had been faring pretty well.
Principally, the January numbers for “Price Indexes for Personal Consumption Expenditures” (PCE) made clear that although tariff-induced inflation warmed slightly, there was no bleed-through to the entire economy – one of the main concerns generated by rising prices.
Starting from the broadest perspective, the headline monthly PCE inflation rate actually eased a bit in January – from December’s 0.4 percent to 0.3 percent. That’s squarely in the range that it’s been since last February (the first full month of President Trump’s second term), as shown below:
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
January 0.3 percent
Headline PCE inflation on a yearly basis cooled, too, in January – from December’s 2.9 percent (the highest since last February) to 2.8 percent. That’s toward the higher end of its range since last February:
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
January 2.8 percent
Moreover, the headline PCE figures show that the Trump post-Liberation Day record has been catching up to the final pre-tariff-y Biden performance on this inflation front.
Between April (“Liberation month”) 2025 through January, 2026, headline PCE rose by 2.23 percent. During the final comparable Biden period (April, 2024 through January, 2025), the increase was 1.63 percent.
But as of the previous PCE release (for December), those numbers were 2.08 percent during Trump 2.0 and 1.34 percent under Biden. So the gap has narrowed in favor of Mr. Trump and tariff supporters (like me).
Core PCE, as known by …
Law enforcement shouldn't be political.
More official U.S. economic reports came out today predating the Iran conflict and the Supreme Court’s decision striking down many of the Trump 2.0 tariffs – meaning that they provide almost no insights into how the economy will perform going forward. But they do represent more evidence on how the important experiment represented by Trumponomics, and these latest data were mixed.
The new downward revision to fourth quarter economic growth was stunning – and tougher to interpret than usual, given the uncertainties acknowledged by the Commerce Department in judging the effects of the October-through-mid-November government shutdown. More on that in a separate post.
But the new report on the inflation gauge favored by the Federal Reserve – the U.S. government’s main inflation-fighting agency – strengthened the case that, on the trade and tariff front, that Trumpian experiment had been faring pretty well.
Principally, the January numbers for “Price Indexes for Personal Consumption Expenditures” (PCE) made clear that although tariff-induced inflation warmed slightly, there was no bleed-through to the entire economy – one of the main concerns generated by rising prices.
Starting from the broadest perspective, the headline monthly PCE inflation rate actually eased a bit in January – from December’s 0.4 percent to 0.3 percent. That’s squarely in the range that it’s been since last February (the first full month of President Trump’s second term), as shown below:
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
January 0.3 percent
Headline PCE inflation on a yearly basis cooled, too, in January – from December’s 2.9 percent (the highest since last February) to 2.8 percent. That’s toward the higher end of its range since last February:
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
January 2.8 percent
Moreover, the headline PCE figures show that the Trump post-Liberation Day record has been catching up to the final pre-tariff-y Biden performance on this inflation front.
Between April (“Liberation month”) 2025 through January, 2026, headline PCE rose by 2.23 percent. During the final comparable Biden period (April, 2024 through January, 2025), the increase was 1.63 percent.
But as of the previous PCE release (for December), those numbers were 2.08 percent during Trump 2.0 and 1.34 percent under Biden. So the gap has narrowed in favor of Mr. Trump and tariff supporters (like me).
Core PCE, as known by …
(What’s Left of) Our Economy: More (Pre-Iran and Pre-Supreme Court Ruling) Evidence that Tariffs Weren’t Fueling Much Overall Inflation
Law enforcement shouldn't be political.
More official U.S. economic reports came out today predating the Iran conflict and the Supreme Court’s decision striking down many of the Trump 2.0 tariffs – meaning that they provide almost no insights into how the economy will perform going forward. But they do represent more evidence on how the important experiment represented by Trumponomics, and these latest data were mixed.
The new downward revision to fourth quarter economic growth was stunning – and tougher to interpret than usual, given the uncertainties acknowledged by the Commerce Department in judging the effects of the October-through-mid-November government shutdown. More on that in a separate post.
But the new report on the inflation gauge favored by the Federal Reserve – the U.S. government’s main inflation-fighting agency – strengthened the case that, on the trade and tariff front, that Trumpian experiment had been faring pretty well.
Principally, the January numbers for “Price Indexes for Personal Consumption Expenditures” (PCE) made clear that although tariff-induced inflation warmed slightly, there was no bleed-through to the entire economy – one of the main concerns generated by rising prices.
Starting from the broadest perspective, the headline monthly PCE inflation rate actually eased a bit in January – from December’s 0.4 percent to 0.3 percent. That’s squarely in the range that it’s been since last February (the first full month of President Trump’s second term), as shown below:
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
January 0.3 percent
Headline PCE inflation on a yearly basis cooled, too, in January – from December’s 2.9 percent (the highest since last February) to 2.8 percent. That’s toward the higher end of its range since last February:
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
January 2.8 percent
Moreover, the headline PCE figures show that the Trump post-Liberation Day record has been catching up to the final pre-tariff-y Biden performance on this inflation front.
Between April (“Liberation month”) 2025 through January, 2026, headline PCE rose by 2.23 percent. During the final comparable Biden period (April, 2024 through January, 2025), the increase was 1.63 percent.
But as of the previous PCE release (for December), those numbers were 2.08 percent during Trump 2.0 and 1.34 percent under Biden. So the gap has narrowed in favor of Mr. Trump and tariff supporters (like me).
Core PCE, as known by …
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