It came in at expectations, but between the tariffs (which I think only get worse in this space), the housing supply shortage, and sticky service prices, my spidey sense is triggered.
I was checking through the energy components, noticed electricity (up 5.9% y/y) and thought about the soon to be cancelled solar/ev/battery tax credits and discontinued Inflation Reduction Act Capex.
The next energy crisis will be in electricity, and this, as you note, given China's awesome productive capacity in such, is totally avoidable.
Current price is $1999. It was "on sale" both then and now. As an LG product it was probably made in Korea but in any case the price went up 43% in less than 60 days. Hard to know how much of that is just normal business and how much is related to tariffs, but 43% is significant.
I have to say, I read a lot of economic analysis. A lot of it is fairly partisan, and can be sort of shrill. Jared has been the only person I'm aware of who seems to have been calling balls and strikes pretty fairly, and if he's concerned, I'm concerned.
The CPI seriously underweights the cost of insurance increases for the average household. This is anecdotal but my personal auto insurance has doubled in the past 3 years. The state where I live has experienced 20% to as much as 50% increases in the past year according the state Insurance Commissioner. Home Owners insurance has also increased due to the fires in the west, the hurricanes in the south and flooding all over the country. For a household with a median income of $80,000 a $2,000 annual increase in insurance costs amounts to a 2.5% increase in the cost of living for that individual family.
Isn't median inflation for the past 110 years right around 2.7%? Yes, this is suboptimal from the government's perspective (because national debt service costs more), but I don't get all the histrionic handwringing. Regression to the mean. It's a thing.
Thx Jim! I got that. Just don’t understand how the tariffs will add to the US gov coffers. Do they “collect” the money as a tax (that eventually) the consumer pays? So the folks (big & small businesses) who buy these tariffed goods are basically paying a huge tax. So much for a tax break in the Big ugly bill?
The import taxes—tariffs—collected by customs agents when imported goods enter the country from tariffed nations go right into the coffers same as the income or payroll taxes you pay.
The importers pay the tax upon entry but they invariably pass some share thru to wholesalers, retailers, consumers.
Thank you. This seems like a scam to me. Otherwise why wouldn't all countries charge these exorbitant tariffs to line their coffers! If they could get away with it...
Thanks for the analysis.
I was checking through the energy components, noticed electricity (up 5.9% y/y) and thought about the soon to be cancelled solar/ev/battery tax credits and discontinued Inflation Reduction Act Capex.
The next energy crisis will be in electricity, and this, as you note, given China's awesome productive capacity in such, is totally avoidable.
Here's a price data point:
On 5/24/25 I paid $1399 for this range: https://www.homedepot.com/p/LG-6-3-cu-ft-Smart-Induction-Slide-In-Range-with-ProBake-Convection-Air-Fry-in-PrintProof-Stainless-Steel-LSIL6334FE/327604161
Current price is $1999. It was "on sale" both then and now. As an LG product it was probably made in Korea but in any case the price went up 43% in less than 60 days. Hard to know how much of that is just normal business and how much is related to tariffs, but 43% is significant.
'Tis said: the plural of anecdote is data.
I have to say, I read a lot of economic analysis. A lot of it is fairly partisan, and can be sort of shrill. Jared has been the only person I'm aware of who seems to have been calling balls and strikes pretty fairly, and if he's concerned, I'm concerned.
This only holds water if there’s no TACO 🌮. If he follows through this time, then we go to 10% by Q2 ‘26.
The CPI seriously underweights the cost of insurance increases for the average household. This is anecdotal but my personal auto insurance has doubled in the past 3 years. The state where I live has experienced 20% to as much as 50% increases in the past year according the state Insurance Commissioner. Home Owners insurance has also increased due to the fires in the west, the hurricanes in the south and flooding all over the country. For a household with a median income of $80,000 a $2,000 annual increase in insurance costs amounts to a 2.5% increase in the cost of living for that individual family.
thank you that's great data
Thanks for the update.
Isn't median inflation for the past 110 years right around 2.7%? Yes, this is suboptimal from the government's perspective (because national debt service costs more), but I don't get all the histrionic handwringing. Regression to the mean. It's a thing.
True. However, GDP growth has been 3.19% since 1947 and now it’s slightly negative.
So when Kevin Hassett says we are collecting billions from the tariffs where does that money go?
Tariffs are a regressive tax that offset a small portion of the tax cuts for the wealthy and corporations.
Thx Jim! I got that. Just don’t understand how the tariffs will add to the US gov coffers. Do they “collect” the money as a tax (that eventually) the consumer pays? So the folks (big & small businesses) who buy these tariffed goods are basically paying a huge tax. So much for a tax break in the Big ugly bill?
The import taxes—tariffs—collected by customs agents when imported goods enter the country from tariffed nations go right into the coffers same as the income or payroll taxes you pay.
The importers pay the tax upon entry but they invariably pass some share thru to wholesalers, retailers, consumers.
Thank you. This seems like a scam to me. Otherwise why wouldn't all countries charge these exorbitant tariffs to line their coffers! If they could get away with it...
Thanks for these viewpoints on the data reports. The added context is much appreciated.
Does the jobs market with massive deportations have an impact that might add to this forecast?
Deportations can put upward pressure on wages which can add to inflationary pressures.