Tariffs force consumer price hikes

Investment Analysis Clubs Macro Economic Trends and Risks
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https://www.wsj.com/business/retail/trump-tariffs-higher-prices-forecast-5233d6c4?mod=hp_lead_pos5

Higher Prices Are Coming for Household Staples

Companies from Hormel to Ace Hardware forecast prices rising as the costs of Trump’s tariffs are passed on to consumers

By Patrick Thomas and Sarah Nassauer, The Wall Street Journal

U.S. companies have an unwelcome message for inflation-weary consumers: Prices are going up.

Companies including Hormel Foods, J.M. Smucker and Ace Hardware said this week they would raise prices for reasons ranging from higher meat costs to tariffs. Large retailers like Walmart, Target and Best Buy said some tariff-related price increases are already in place. More are on the way….

Dollar General CEO Todd Vasos said climbing consumer prices elsewhere could benefit his chain. While the company’s core clientele of low-income shoppers has increased spending at the chain, higher-income shoppers are trading down to Dollar General as they look for deals…. [end quote]

Other factors behind price hikes are domestic issues like herd thinning and bad weather.

Higher inflation is on the way.

Wendy

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More data.

Cavallo and researchers Paola Llamas and Franco Vazquez have been tracking the price of 359,148 goods, from carpets to coffee, at major online and brick-and-mortar retailers in the United States.

They found that imported goods have become 4% more expensive since [low character person] started imposing tariffs in early March, while the price of domestic products rose by 2%.

The biggest increases for imports were seen in goods that the United States cannot produce domestically, such as coffee, or that come from highly penalised countries, like Turkey.

These price hikes, while material, have been generally far smaller than the tariff rate on the products in question - implying that sellers were absorbing some of the cost as well.

Yet U.S. import prices, which don’t include tariffs, showed foreign exporters have been raising their prices in dollars and passing on to their U.S. buyers part of the greenback’s depreciation against their currencies.

“This suggests foreign producers are not absorbing much if any of the U.S. tariffs [contrary to statements by low character person], consistent with prior economic research,” researchers at Yale University’s Budget Lab think-tank said in a blog post.

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People joining long souplines do not make the best customers for higher priced goods.

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Maybe the plan is a nice recession to fix inflation?

Certainly feels that way.

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Here is the (draft) paper by Llamas and Franco:

DB2