Axios: "Hard Data Suggests Tariff-Driven Inflation and Recession Fears May be Overblown"

The media has pushed the idea that Trump's tariffs would spark rampant inflation and provoke a deep recession harder than they pushed the idea that Biden was a "super-ager" who routinely "ran circles among his Millennial staffers."

And now Axios, in a brave Jake Tapper sort of way, actually bothers to look at the evidence and the numbers, and assigns its Market Watch Repoter Emily Litella to say,
"Nevermind."

Hard data suggests tariff-driven inflation and recession fears may be overblown

With major indicators from April -- the month of peak tariff uncertainty -- now in, none show the kinds of recessionary or inflationary conditions implied by business and consumer surveys.

Why it matters: Warnings and anecdotes are taking on greater importance as signs of how tariffs are working their way through the economy.

The big picture: New data out Thursday showed steady retail sales and a surprising drop in wholesale prices in April. So far, so good.

But also Thursday morning, the country's largest retailer warned that it will not be able to absorb tariff-related price increases -- even considering the trade war pullback announced earlier this week.

Walmart, known for its low prices, will pass some of those costs onto the consumer. If Walmart can't hold the line, it's hard to see how other retailers might be able to.

Walmart is particularly dependent on China for Cheap Plastic from China.

I do enjoy how they admit the facts momentarily, only to immediately undermine the facts with more spin and more premonitions of doom.

What they're saying: "We're wired for everyday low prices, but the magnitude of these increases is more than any retailer can absorb," Walmart CFO John David Rainey told CNBC on Thursday.

"It's more than any supplier can absorb. And so I'm concerned that consumer is going to start seeing higher prices. You'll begin to see that, likely towards the tail end of this month, and then certainly much more in June."

Oh, you have Concerns?

Your Concerns are:

[ ] Noted

[ ] Not Noted

[X] Ridiculed

By the numbers: Retail sales rose by 0.1% in April, after a massive spending surge that was even stronger than initially reported. The control group, used to calculate personal consumption expenditures in GDP, fell by 0.2%.

It's almost as if business optimism and consumer confidence are spiking under Trump.

Axios again attempts to re-establish its predictions of doom by speculating that spending only increased due to people rushing to make purchases before the dreaded tariffs.

No doubt, that may be a contributor. But they push aside all other explanations in favor of the negative one that reinforces their prior beliefs.

Meanwhile, inflation fell. Axios concedes that falling inflation might disprove their predictions of inflation falling.

What a major concession.

...

Between the lines: The Producer Price Index, a gauge of wholesale prices, showed little sign of tariff-related price pressures that businesses have warned about.

PPI fell by 0.5% in April after a flat reading in March, rounding out an upbeat inflation snapshot after the index's consumer counterpart released Tuesday.

Goods prices were flat last month after falling almost a full percentage point in March. Services prices fell by 0.7%, the biggest drop since the index began in 2009.

The bottom line: "There is little evidence, so far, that tariffs are inflationary and instead profit margins are being squeezed. But as Walmart suggested Thursday morning, that is a situation that may not last long," ING chief international economist James Knightley wrote in a note.

Politico, too:

Who pushed these Grim Forecasts, Politico?

If it's the sources you rely on for every DNC press release story-- are you going to apply more skepticism to their claims going forward, or not so much?

posted by Ace at 06:30 PM

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