May’s Consumer Price Index (CPI) report showed inflation pressures eased on a monthly basis despite investor concerns that President Trump’s tariffs would accelerate the pace of price increases…
Declines in car and apparel prices — categories expected to show some of the earliest impacts from tariffs —helped drive a cooler-than-expected core CPI reading last month.
“We we’re not really seeing much of the pass through, if some at all, from the tariffs,” RSM chief economist Joe Brusuelas told Yahoo Finance, noting the 0.3% decline in new vehicles and 0.5% drop in used cars and trucks.
As the article noted, car and apparel categories are the ones expected to show the impacts soonest. Steve et al. have posted many times about how the tariffs can be used as an excuse to raise prices. Hasn’t happened yet.
Got me. I was just following along with what was said in the article…
“We’re not really seeing much of the pass through, if some at all, from the tariffs,” RSM chief economist Joe Brusuelas told Yahoo Finance…despite investor concerns that President Trump’s tariffs would accelerate the pace of price increases…
So you think May is too soon. What would be a better expectation?
Speaking for myself, I don’t have a specific view other than May CPI seems a tad early.
Orders need to be placed, goods manufactured, goods shipped and distributed, etc. And all players could adjust their behavior (change suppliers, substitute products, etc) in response to “policy,” if that’s the right word for it.
DETROIT, May 7 (Reuters) - Ford Motor has hiked prices on three of its Mexico-produced models effective May 2, becoming one of the first major automakers to adjust sticker prices following U.S. President Donald Trump’s tariffs.
Interestingly, I have seen reports of production being moved to the US from Honda, Nissan, Toyota, and previous announcements from GM, before yesterday’s major announcement from GM. But not a word from Ford about moving anything???
May CPI, auto subsector:
New Vehicles: The index for new vehicles decreased 0.3% in May.
Used Cars and Trucks: The index for used cars and trucks also decreased 0.5% in May.
The problem with monthly CPI numbers is that they do all sorts of “seasonal adjustments” to them. The seasonal adjustments are necessary to make the entire sequence across the years meaningful, but it also means that sometimes single month numbers don’t appear correct. I didn’t look up the unadjusted numbers.
Or maybe media hysteria had everyone flocking to dealerships in April, so the dealers gouged them?
Google’s AI thingy says Subaru and Hyundai have also warned of impending price increases.
Meanwhile, ever on top of the situation, TIG acts.
WASHINGTON, June 12 (Reuters) - U.S. President Donald Trump on Thursday warned he may soon hike auto tariffs, arguing that could prod automakers to speed U.S. investments.
“I might go up with that tariff in the not too distant future,” Trump said at a White House event. “The higher you go, the more likely it is they build a plant here.”