MAGAnomics – Despite Doom and Gloom Tariff Predictions Inflation Remains Low…

The Bureau of Labor Statistics released the latest consumer price information today which shows overall low inflation at 1.6 percent (with energy price deflation, and flat food prices).

Excluding food and energy costs the total CPI remains low at 2.2%.   This low inflation is the exact opposite of what financial media were predicting when President Trump began the series of import tariffs in 2017, which continued throughout last year.

(data link)

When President Trump began the tariffs against global Steel and Aluminum imports; and when President Trump began the first set of tariffs against Chinese imports; almost all financial media went into fits of apoplexy claiming we would see massive increases in prices.   Reality shows their doomsday predictions were completely over-hyped.

Commerce Secretary Wilbur Ross using a can of Campbells soup to deconstruct the ridiculous predictions of a massive price increases over tariffs.

Back in 2015 and 2016 CTH outlined the potential if Candidate Trump could initiate his economic program; we now call that MAGAnomics:

No other economy in the world innovates like the U.S.A, Trump sees this as a key advantage across all industry – including manufacturing.  The benefit of cheap overseas labor, which is considered a global market disadvantage for the U.S., is offset by utilizing innovation and energy independence.

The third highest variable cost of goods beyond raw materials first, labor second, is energy. If the U.S. energy sector is unleashed -and fully developed- the manufacturing price of any given product will allow for global trade competition even with higher U.S. wage prices. (more)

What we are seeing in 2019 are the benefits of that exact program Donald Trump was campaigning with.

Real earnings are rising at a much more rapid rate than inflation, which means more spending money in the hands of American workers.  Additionally, it is the foreign manufacturers, and multinational corporations, who are absorbing the costs from U.S. tariffs while the U.S. manufacturing base is reestablished.

This inflation data follows on the heels of the BLS latest numbers showing significant decreases in trade deficits in November 2018.

The U.S. monthly international trade deficit decreased in November 2018 according to the U.S. Bureau of Economic Analysis and the U.S. Census Bureau.

The deficit decreased from $55.7 billion in October to $49.3 billion in November, as imports decreased more than exports.

The previously published October deficit was $55.5 billion.

The goods deficit decreased $6.7 billion in November to $71.6 billion. The services surplus decreased $0.3 billion in November to $22.3 billion.  (read more)

This is important data because the import values are deducted from our economy when calculations of Gross Domestic Product (GDP) are announced.   Lower imports means higher GDP growth rates.  [The fourth quarter GDP figures are not out yet]

Inflation is low; wages are up; workers have more disposable income in their pockets.

Add that to lower import purchases during the holidays when shopping was high and you get lower overall durable good inventory…. Which means more manufacturing demand to fulfill orders….. Which means the U.S. economy is simultaneously self-sustaining and expanding.

The MAGAnomic plan is working.

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This entry was posted in Donald Trump, Economy, Election 2020, energy, Environmentalism, European Union, media bias, NAFTA, President Trump, Professional Idiots, propaganda, Uncategorized, US Treasury, USA, USMCA. Bookmark the permalink.

64 Responses to MAGAnomics – Despite Doom and Gloom Tariff Predictions Inflation Remains Low…

  1. jmuniz1 says:

    Good information.

    Liked by 1 person

    • ForGodandCountry says:

      No, it really isn’t.

      “Excluding food and energy costs” is precisely why the CPI number is total BS. If they were honest, they would have a straight CPI that includes food and energy as well as an “adjusted CPI” that doesn’t in order to compare and contrast them.

      Retail food prices are up over 80% just in the past several years, as anyone who has bought a “pick your meal combo #” at their favorite place recently can attest.

      Like

  2. Petrel says:

    Sundance, you called the minimal price and maximal wage effect of MAGA perfectly. Congratulations

    Liked by 12 people

  3. sjp says:

    can’t wait for 4th qtr GDP #’s to come out, I’m assuming the yearly GDP avg will be over 3% and when that happens 0 will still be the only prez in US HISTORY to NEVER have at least 1 year of a 3% avg GDP growth or higher….the moron had 8 yrs with the EASIEST Fed policy (rates) in our history and the idiot couldn’t get 1 yr of 3% GDP Growth….LOL…can’t wait to rub this in some libs faces that always say “Huh” with a really confused look on their face when I tell them of 0’s record.

    Liked by 6 people

    • Bert Dare says:

      Let’s face it. The moron never intended to grow the economy. His goal was to run it to the ground. He was selected by the left precisely because he was a nincompoop and a con man. And gruberites fell for the scam.

      Liked by 1 person

    • Bert Darrell says:

      Zero did it on purpose. Not that he ever understood how to run a prosperous economy. He was/is a con man.

      Liked by 4 people

      • SwampRatTerrier says:

        Obama: “……leading out of my rear…..” Didn’t he say that?

        Maybe he meant leading to the rear – behind the times………..

        Liked by 1 person

      • alonzo1956 says:

        Obama was without a doubt one of the greatest orators of our time, and I’m serious about that. Simply look at the millions of people he fooled worldwide, while they felt good about it. He will go down in history as a terrible President and a decade or so from now, nobody will remember how good of an orator he was. What was his legacy?

        Like

  4. Snow White says:

    Food prices have been going up, I have yet to see them flat or decrease. It’s ridiculous.

    Liked by 1 person

    • Shakey Leaf says:

      I’m not seeing them go up. During Os 8 years, companies shrunk the size/amount in packages and charged the same or raised the price. Coffee, cereal, everything.

      Liked by 1 person

    • LivingRedInBlue says:

      Who said they were going to be flat or decrease?

      Like

    • TreeClimber says:

      Don’t know where you are, but where I am we’re getting more for the same amount of money we were a few years ago. Not much more, and it fluctuates, but at least a little more.

      Like

    • The Boss says:

      I’m seeing meat prices decline, especially beef. And more in-store promotional deals on food than I can remember. There is no doubt grocery prices are being pressured. Between working in a grocery store as a teen, spending the vast majority of my career in packaged consumer products and often doing the food shopping for the family, I developed a better sense than most on retail deals. (Mrs. Boss my Valentine is just as good, maybe better).

      Liked by 1 person

    • Kenji says:

      Whole Foods spiked their prices … and just this week (I do all the shopping) Safeway jacked up prices on everything. This whole “dynamic” pricing of food SUCKS … BIG TIME. I walked out of Safeway today with HALF of what I went in there for … so I will just wait till they drop all the prices back to last week’s level.

      Like

      • Safeway’s so called “everyday low prices” are admittedly outrageous. I buy only the “club price” sale items. Pricing at Whole Foods reflects the vicissitudes of its new owner, though the house brand “365” retains good value.

        Like

    • GB Bari says:

      Yes. Here in central Maryland we have seen no reductions at the food stores. Only increases. The only good news is that most of the increases have been modest.

      Meat, other than chicken has been sky-high for quite awhile. Domestic fresh fish fluctuates but domestic shellfish is always high. And if you shop for domestic / local organic produce or local ground raised poultry, pork, or beef, you pay dearly. We are still waiting for the MAGA transition from the globalist multinational-controlled food markets back to local control.

      Like

      • swampratterrier says:

        Do you have any Aldi or Walmarts there?

        Sounds as though a couple of large chains are sharing a local monopoly there.

        That has happened across the country numerous times over the last few decades.

        Like

    • Everett Miller says:

      Maybe you should start shopping at Kroger’s instead of wasting your money at Whole Foods so you can feel superior about yourself.

      Like

  5. WSB says:

    Phenomenal. Now, if we can rid ourselves of blue state governance, then everyone wins!

    Frack you, Cuomo!

    Liked by 8 people

  6. I’ll be 60 this year and never thought I’d ever see numbers this solid again. Thank God for PDJT.

    Liked by 6 people

    • SwampRatTerrier says:

      Ain’t it Amazing what We can do when we’re getting Rid of Some of the CROOKS!

      Get Busy People – We’ve all got Tons of LOCAL CROOKS to drain out of the swamps, that is your local school boards, local city and town councils, local mayor’s office, etc. etc, etc….

      Liked by 1 person

  7. TonyinLA says:

    And 1/2 the country wants to impeach the guy whose vision and hard work made it all happen. Sad!

    Liked by 3 people

  8. Ghost says:

    Observations from a smaller limb.

    Part of the recent Bureau of Labor Statistics latest release has what is called the JOLT Job openings. JOLT stands for Job Openings and Labor Turnover Survey. This excludes the farm industry. Projected JOLTS forecast was 6.84M,, actual was 7.34M. This is the highest number ever reported. Looking for larger growth numbers this spring.

    In a speech yesterday Kansas City Federal reserve bank president Esther George stated she supported a pause in raising the Fed Funds Rate. My tracking of her has her listed as the most vocal Hawk (pro rate hikes). A major reversal.

    https://www.reuters.com/article/us-usa-fed-george/feds-george-says-she-backed-pausing-rate-hikes-in-order-to-assess-impact-idUSKCN1Q2032

    Liked by 7 people

    • Kenji says:

      D’ya think the FED have peeked out of their Ivory Towers to SEE what their prematurely HAWKISH actions and words did to the Stock Market (which is a FORWARD looking marketplace)!? Have they figured out WE the PEOPLE are pissed being their political pawns!?

      Like

      • Ghost says:

        I actually think they could care less what we think, but they do have two problems.

        1.PDJT with his economic and trade policies has stopped the ex-filtration of American wealth. So the world is heading into a major economic slowdown. He cut of the spigot so to speak. The other countries haven’t adapted.
        2.In the 21st century it is easy to invest anywhere so we are witnessing a flight to safety with purchases of U.S. stocks, bonds and treasuries by individuals and small companies from around the world.

        They didn’t see it coming so they are worried about Europe and Asia, not we the people.

        Liked by 1 person

        • Ghost, why is it that the experts NEVER see it coming? From financial crises to the Berlin Wall to the end of the Soviet Union to MAGAnomics. Whatever disease the experts got, they must have caught it from the perennially erroneous Paul Krugman and Bill Kristol.

          Liked by 1 person

          • Ghost says:

            Don’t mean to shock you, but a few people in swamp conference rooms were laughed at in the 80’s saying the Soviet were bankrupt. There usually are those who point out the reality, but groupthink is simply to powerful in closed nit organizations. Those who were right before hand have to be cast aside or vanished so as not to cast a light on groupthinks inability to see.

            Like

  9. Piggy says:

    Another article to piggyback (pun intended) and augment this article. It’s long but very good.

    “The way forward requires refocusing on the American citizen as the basic unit of the economy. This is the essence of a nationalist political economy, which we very much need if our country’s tradition of personal independence and limited government is to endure, a tradition in which government’s primary economic role is not to provide welfare but to safeguard the conditions that make productive work possible.” (D. McCarthy)

    https://www.firstthings.com/article/2019/03/a-new-conservative-agenda

    Liked by 5 people

    • GB Bari says:

      Awesome article! Thanks Piggy!

      I recommend it to everyone – with the precaution that you need to reserve at least an hour to read, mentally masticate, and intellectually absorb the rich writing of author Daniel McCarthy.

      He provides a strong historical political-economic background for an intellectually reasoned argument why Trump’s nationalism is the correct way to proceed forward for the U.S.

      Liked by 1 person

  10. MAGAbear says:

    If the Trump economy were growing at 10%, the free trade fanatics would be complaining that it could’ve grown by 12% if not for tariffs. They’re as beholdened to free trade dogma as enviro nuts are to green lunacy.

    Imagine if we had sane state government in states like NY and CA and the added energy production we could unleash for our economy? The left really does ruin everything they touch.

    Liked by 2 people

  11. zorrorides says:

    A common-sense US economy is MAGA KAG Plus+. Of course, yes we can grow our Main Streets and enjoy increased pay for all workers in the productive economy. Government workers, however, need to catch up by having their pay held stagnant for a decade or more.

    After the US becomes truly self sufficient in energy our economic preeminence will be secured. We will manufacture for domestic use and for export profit. With trade agreements set between USA and an individual nation we can break the power of the giant multinational corporations, and revive better working free-market economies.

    TY Sundance!

    Like

  12. “The third highest variable cost of goods beyond raw materials first, labor second, is energy.”

    President Trump is HITTING on ALL CYLINDERS!

    √ Energy:
    • Independence ACHIEVED in under 2 years!
    • Dominance EMERGING through Oil and LNG (and coal) Exports.

    √ Labor:
    • Job Openings in excess of Job Seekers DELIVERING Main Street Wage Growth.
    • Prison Reform RETURNING minor offenders back into the Workforce.
    • Apprenticeships RE-SKILLING the Unemployed to reenter the Workforce.
    • Automation, Robotics and Artificial Intelligence REDUCING labor content to offset USA Wages.

    √ Materials:
    • Steel and Aluminum Tariffs RESTORING Domestic Manufacturing.
    • Federal Lands REOPENING for Mining.
    • Federal Permitting ACCELERATING for Raw Materials extraction.

    √ Buy USA and Hire USA:
    • Executive Order for Federal Spending on Infrastructure and Programs to BUY USA.
    • Executive Order for All-of-Government Federal Budgeting to SURGE AI-from-USA.

    Liked by 3 people

    • Bugsdaddy says:

      My only complaint is on the energy front. And it isn’t the Presidents fault. The utility monopolies (state controlled entities) are a joke. For example, natural gas is at historical low prices, and yet the gubmint authorizes increases in retail cost to the consumer every time they are asked for. I don’t begrudge anyone (in private business) to get the profit level the market will bear, but the utilities (Monopoly) margin continues to increase year over year almost doubling in many cases since 2017.

      I also hate to partially disagree with Sundance, but regarding general retail prices, margins have also in general increased. In some regions of the country the impact is greater than others and mind you, that is overall retail (clothing, TV’s, XBox games, whatever!)…..for grocery, margins nationally have remained pretty steady for years. Now that does not mean prices have NOT gone up, or that some regions have a greater fluctuation than others, only that the price increases you do see are a reflection in the price of the goods and labor.

      You also need to consider that many of the increased labor costs are a direct result of regulation by the government. As the Presidents crew continues to whack away at many of the stupid regulations imposed upon us by the bureaucracy, we ( I hope) will begin to see that cost savings begin to pass through to more competitive pricing on the goods and services we really want. That is really and truly why it is so important to reduce the size of government (local, state, federal). They are an incredible suck of resources better used elsewhere.

      https://csimarket.com/Industry/industry_Profitability_Ratios.php?s=1200

      Liked by 2 people

  13. Some more very positive data points from recent reports I get:

    Houston unemployment rate Dec 2018 at 3.9%, lowest since April 2008. So again, NOT better during BHO’s term (contra to typical leftist argument). Manufacturing jobs in Houston area up 15,600, mostly in fabricated metals and oil field equate (2011 was also high, at 15,900 due to beginning of fracking). Note that this occurred EVEN THOUGH energy sector employment has still not rebounded to peak levels, and because of efficiency, likely total employment in this sector may not reach prior cycle peaks.

    Texas on track to produce 1.4 B barrels of crude oil/condensates. DOUBLING prod’n over 6 years. The state of TX is now the 7th largest producer in the world.

    On inflation, CPI in Houston up 2.3%, slightly above last year. 2019 forecast is lower. Food and beverage alone up 1.2%, with grocery prices FLAT–all the rise due to costs of dining out. FWIW, that would align with my anecdotal experience.

    Liked by 2 people

  14. Pyrthroes says:

    We like Trader Joe’s because, despite the chain’s optional high-premium “organic” schtick, there’s good selection (TJ’s is not a supermarket), and all you have to do is nuke the Pan Kao Chicken.

    Restaurant prices continue edging up, but this too is a Gangrenous legacy with the added fillip of anti-consumer $15/hr. (“living wage”) something-for-nothing mandates noticeably impacting small-business proprietors’ viability.

    Meantime, Sundance’s 2018 prognoses concerning Main Street vs. Wall Street –America’s productive “real economy” vs. Donahue’s K-Street/Chamber of Commerce (sic) fiscal/monetary “casino royale”, the latter floating trading desk “derivatives” tied to the Powell Fed’s perverse deficit incentives– has been borne out in spades. For what it’s worth, CTH has proved dead-on with Brexit and related commentary too.

    Liked by 1 person

  15. One ominous sign in our economy = car loan payment deliquency rates are increasing. This metric was an early warning sign to the 2007 2008 collapse.

    I am not saying we are headed into a recession, I just want folks to be up to speed on things. Sub prime lending in the new/used car industry has been increasing for years, going back to the 2008 used car buyback scheme in which people with good used cars were suckered into buying new cars with new car payments. In the process, the Auto industry destroyed hundreds of thousands of reliable used cars that could serve working families for years.

    Like

  16. MAGA Truth Seeker says:

    How exactly are companies absorbing the cost of US Steel Tariffs?

    Like

    • zorrorides says:

      How it’s working for us right now- very good for the US of A.
      The foreign source of steel has to pay the tariff, the US buyer pays about the same as before the tariff.

      POTUS knew the benefits we’d get when trade policies are made by Wilburines instead of CoC /bureaucrats/ politicians.

      Liked by 1 person

      • Maga Truth Seeker says:

        I appreciate that information. Thank you

        Liked by 1 person

        • zorrorides says:

          TY Maga. Today I see that my post was vaguely written. It’s not required that the foreign source (*has to*) pays the govt’s tariff. But somebody must pay the tax or the goods aren’t admitted into the US. China is paying the tariff but not recouping the money by raising prices to US customers. Many kinds of ‘market forces’ push these prices to this current equilibrium. Trump and the Wilburines foresaw this rightly, and will continue to see ahead as these forces change.

          Maga, you must’ve understood what what I meant to say. Thank you so much for not embarrassing me over what I said wrong.

          Like

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