If you’re a baby-boomer or a fan of old sitcoms, you know the show Car 54, Where Are You? It came to mind as I was examining the new consumer price inflation data that came out of the Labor Department this morning. Because these consumer price index (CPI) should make the country’s tariff-mageddon-mongers ask, in an equally plaintive tone, “Tariffs-led inflation where are you?” That is, the results at best offer scarcely any evidence that the Trump trade levies are eating away much at American shoppers’ buying power.
As usual, let’s first look over the statistics for metals-using industries, because they’ve been dealing with tariffs on steel and aluminum since late March, when they were first imposed. The table below compares price changes for their products with price changes for overall “core inflation” (which excludes food and energy prices, supposedly because they’re volatile for reasons that have little to do with whatever overall upward or downward general pricing pressures are shaping the economy). For good measure, I’ve included related products in an effort to distinguish between price changes due to fluctuating metals costs, and price changes due to costs of other materials or substances in the product in question – e.g., fresh produce and canned produce.
And as RealityChek regulars will notice, I’ve not only included autos and parts here, but added appliances and some other metals-using goods.
As for the dates, they cover the latest monthly price changes (through January), the changes from April (the metals tariffs’ first full month) through January, the year-on-year changes for April, and the year-on-year changes for January. The last two are probably the best measures of whether the impact of the trade curbs has been intensifying – for better or worse.
Dec.-Jan. Since April y/y April y/y Jan.
core CPI: +0.24 percent +1.67 percent +2.12 percent +2.15 percent
fresh fruits -0.19 percent +0.07 percent -0.43 percent +1.25 percent
fresh fruits: +1.14 percent -0.28 percent +1.38 percent -0.74 percent
fresh vegetables: -1.66 percent +3.01 percent -2.50 percent +3.64 percent
processed fruits -0.88 percent -0.64 percent -1.29 percent -0.46 percent
canned fruits: -0.05 percent +0.94 percent -0.14 percent +0.70 percent
canned fruits: -1.59 percent -0.56 percent -1.60 percent +0.35 percent
canned vegs: +0.45 percent +1.44 percent +1.00 percent +1.11 percent
soups: +0.34 percent +0.80 percent -0.38 percent -0.81 percent
malt beverages +0.07 percent +1.66 percent +0.84 percent +2.23 percent
alcoholic -0.04 percent +1.34 percent +2.17 percent +2.25 percent
non-frozen, non- +1.32 percent +2.45 percent -0.52 percent +1.80 percent
carbonated drinks: +2.08 percent +4.92 percent +0.04 percent +5.53 percent
juices & non- +1.84 percent +3.39 percent -0.26 percent +3.31 percent
new cars & trucks: +0.22 percent +0.93 percent -1.61 percent +0.06 percent
motor vehicle +0.33 percent +1.92 percent -0.74 percent +2.12 percent
appliances: +1.36 percent +4.56 percent +0.27 percent +6.43 percent
major appliances: +0.99 percent +7.47 percent +1.55 percent +9.66 percent
non-electric +0.67 percent -0.84 percent -1.57 percent +3.59 percent
cookware & tableware:
tools, hardware, +0.98 percent +0.77 percent +0.19 percent +1.57 percent
The two sets of year-on-year figures do reveal some evidence of hotter inflation in metals-using products between April and January. Also apparent, however, is accelerating inflation in several of the non-canned versions of these products. As has been the case in previous months, prices change for all sorts of reasons; tariffs are only one and nothing indicates that, generally speaking, they stand out.
The evidence is more mixed for other food sectors that offer lots of canned products, like soups and beverages. The trouble is, they also offer lots of products in other kinds of containers or packages. So tariff alarmists can point to the beverages as examples of prices rising at a faster annual pace since the metals levies were imposed. But when it comes to soup, prices have been falling at a faster pace.
Moreover, if the metals tariffs have been so important, why is January year-on-year inflation for all three of the canned products so much lower than January year-on-year overall core inflation?
Moving away from foods, faster inflation can also be seen in automotive products, appliances, cookware and tableware, and tools and hardware. But as with some of the food categories, the January-January inflation rate for the tools section is below that for the economy’s “core” overall, and appliance prices also have been affected by a separate set of tariffs slapped on large household laundry machines last February. So consumer prices are still rising strongly for these goods, although it’s hard to see why year-old washing machine tariffs or ten-month old metals tariffs would be major factors behind the big December-January increases shown above.
In recent previous posts on consumer price data and the Trump tariffs, I’ve been providing information on products that will be affected by levies on imports from China. But the more I think about it, the less confident I am that the effects can be accurately gauged at this point. For one, the first full month of tariffs on goods from China came in August. The amount was relatively small ($34 billion). The first full tariff month for another $16 billion worth of Chinese import categories came in September, but none of the products in either tranche belonged in the consumer categories. (Because they were producer goods – the kinds of parts, components, and materials that go into consumer and other products – confident about measuring their effect on U.S. producer prices – the next set of which come out tomorrow.)
A major set of tariffs containing many consumer goods levies was announced in mid-September, but they only went into effect late that month, so only four months worth of data for those products is available. And plaguing analysis of any of these price statistics, they’re issued using a classification system that’s different from that used in the list of tariff-ed Chinese goods. In a fair number of cases they line up; in most cases, they don’t, and finding satisfactory matches is challenging.
So as I see it, more patience is needed before a useful verdict on the China tariffs can be delivered. But metals tariff-led inflation clearly remains mythical – which of course only strengthens the case for President Trump’s determination to overhaul American trade policy.