Economic News: Inflation Falls, Incomes Surge, Trade Deficit Halves
By Sundance
Self-interested Wall Street analysts and leftist economic ‘experts’ are once again proven wrong. It’s almost impossible to find objective financial news put out by corporate media. They skew everything with a negative tone, yet the data shows (just like 2017) that President Trump’s MAGAnomic policies are starting to surface
News pundits said President Trump’s tariff policies would skyrocket prices. In reality the yearly inflation rate [BLS data] has dropped to 2.1%, the lowest in four years. Core prices (removing food and energy) rose 2.5% from a year earlier, below the March figure of 2.7%, and the lowest in more than four years.
Personal incomes tripled expectations coming in at 0.8% for the month of April. “Personal income surged 0.8% well ahead of the forecast for 0.3%.” Then comes the predictable. The trade deficit dropped by 46% in the month of April.
The goods trade gap contracted 46.0% to $87.6 billion last month, the Commerce Department’s Census Bureau said on Friday. Goods imports decreased $68.4 billion to $276.1 billion. Exports of goods increased $6.3 billion to $188.5 billion. (source)
Companies front-loaded their orders from China in February and March, causing imports to skyrocket and a massive skew in the GDP data. As expected in April there are fewer orders because the goods were already received in the first quarter, imports drop in half.
Even though the government is increasing taxes (called tariffs) on stuff we import from other countries, prices in stores might not go up as much as you'd expect — and could even stay the same as they were a few years ago, like in 2017. Why? Because companies are saving money in other areas:
Energy is cheaper (gas and electricity),
Fuel and shipping costs are down, and
It's cheaper to store and move products around.
At the same time, companies in other countries that want to keep selling their stuff in the U.S. will often lower their prices to stay competitive, even if they get hit with a tariff. So all those savings (lower costs on both sides) can cancel out the price hikes from tariffs. For everyday people, this means:
Cheaper gas at the pump,
Lower electric bills,
More jobs and higher wages because the businesses need more workers.
Been A Good Week
Personal income jumped 0.8% this month, tripling expectations.
The US trade deficit has been cut almost in half, the largest single-month narrowing of the deficit on record.
U.S. core inflation falls to the lowest level in 4 years.
The Supreme Court gives President Trump the green light to reverse Biden’s immigration influx of Venezuelans/Cubans/Haitians/Nicaraguans.
Volkswagen announced they are making a “massive” investment in the U.S to avoid tariffs.
(NY POST) – Volkswagen is holding “fair” and “constructive” talks with the United States government on tariffs and wants to make further investments in the country, CEO Oliver Blume told German newspaper Sueddeutsche Zeitung.
Several foreign companies have announced new US investments in response to President Donald Trump’s import tariffs, but German carmakers have been more cautious about committing more resources to what is their biggest export market.
Volkswagen’s Audi brand, which has no production in the United States, is planning to produce some models in there, although the brand has said that the plan pre-dates the Trump administration. (link)
