(What’s Left of) Our Economy: Politico’s Failed Takedown of Trump’s Auto Jobs Policies

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Let’s all hope that Politico doesn’t start a new publication called “Economico.” Because its latest venture into economic policy reporting – yesterday’s examination of President Trump’s trade-centric approach to strengthening America’s automotive industry – had about as much in common with sound economic analysis as Beto O’Rourke’s current talking points have with the Gettysburg Address.

The headline nicely sums up the piece’s theme: “Trump facing failing strategy on auto jobs as he heads to Ohio.” And the news hook is the President’s trip today to Ohio, where the announced closure of a long-time General Motors factory in the northeastern town of Lordstown has understandably attracted national attention given Mr. Trump’s 2016 campaign promise to ensure its survival, and given the importance of Lordstown-type manufacturing workers to his political success.

But the article’s treatment of the Lordstown decision and the broader Trump auto industry record is based almost entirely on cherry-picked facts presented in such stark isolation as to produce a thoroughly misleading picture to readers.

First, the piece doesn’t say that, for all the disrupted lives already caused and sure to continue due to GM’s Lordstown decision, Reuters reported the day before that

GM Chief Executive Officer Mary Barra has said the automaker expects to have 2,700 job openings by early 2020 at other thriving plants, enough to absorb nearly all of those displaced in plants in Maryland, Ohio and Michigan willing or able to uproot for work hundreds of miles away. GM said another 1,200 affected hourly workers are eligible for early retirement.

Based on a plant-by-plant count provided by GM, if every worker displaced or soon to be displaced volunteers for or accepts a new job – and those eligible to retire do so – that would potentially leave up to 500 GM workers jobless, far fewer than the thousands decried by the UAW [United Auto Workers union] and Trump.”

No one should underestimate the economic and other difficulties of relocation – especially from an economically struggling area like northeastern Ohio, where homes on the market don’t exactly command primo relative prices. And GM’s claims should be closely monitored going forward. But the Politico article, and all the coverage of Lordstown, should have mentioned that, based on what’s been promised, most of the released employees won’t be left on the streets (figuratively speaking).

By contrast, the Politico reporters unquestionably swallowed the claims by GM as well as Ford about the Trump administration’s metals tariffs crippling the auto companies’ prospects. Had they asked the obvious question about how the higher metals prices compared with the auto-makers’ overall costs, they’d have discovered that the tariffs barely moved the needle on overall figures – and that the companies’ could easily have found (and still can find) other economizing options to offset them.

Nor did the authors ask the equally obvious questions about overall trends in Lordstown-area and Ohio automotive and manufacturing employment. A five-minute dive into Bureau of Labor Statistics (BLS) data would have found that, during President Trump’s first 23 data months in office, the state’s manufacturers have added more jobs (20,400) than during the final three years (36 months) of former President Obama’s administration (19,700). The Trump-era gains are especially impressive since they’ve come later in the business cycle, when expansions typically lose momentum. (These time periods are chosen since they’re the stretches of each administration closest to each other during the same business cycle.)

In addition, although the latest figures only go up to September, 2018, the two Ohio counties in which Lordstown and nearby Youngstown (another victim of the GM decision) – Trumbull and Mahoning, respectively), have fared relatively well during the Trump years as well.

Specifically, during the first 19 data months under Trump, Trumbull County lost 569 manufacturing jobs. (BLS doesn’t track automotive employment at the county level.) During the final 19 months of the Obama administration, manufacturing payrolls fell by 1,150. For Mahoning, the comparable numbers are: Trump, up 294, Obama, down 468. Those are hardly gangbuster results during the Trump years. But failure?

In automotive specifically, from the state-level perspective. President Trump’s impact looks more mixed – but hardly failed, either. During his first 23 data months in office, Ohio vehicle makers added only 800 jobs. But during Mr. Obama’s final 23 months in office, they shed 1,300. In parts, the “Obama effect” looks better – Ohio-based facilities increased their payrolls by 3,600 during his last 23 months, whereas they boosted employment by only 800 under the Trump administration so far.

Interesting, a similar mixed picture emerges on a nation-wide basis. During Mr. Obama’s last 23 data months in office, U.S. auto and light truck producers increased employment by 21,400, versus a 23,400 improvement during the first 23 Trump months. But the Obama numbers for auto parts are much better – a gain of 34,900 during his last 23 months versus an 11,900 rise for the first 23 Trump months.

At the same time, are the lagging overall Trump national numbers due entirely or even mainly to his allegedly failed trade policies? Or to the topping out of American light vehicle sales that began in the fall of 2015? The Politico authors never give readers a chance to decide.

In fact, the changing automotive cycle surely accounts for much and maybe all of the declining rate of auto industry investment during the Trump years so far, especially compared with the big numbers racked up during the Obama years. Most of that spending of course came much earlier in the auto and broader economic cycle, when the sector and the rest of the nation were rebounding (with decisive federal aid) from a near-death economic experience.

The Politico article also repeats the canard that “International trade makes it difficult to distinguish between what’s truly American and what’s truly foreign.” Actually, it’s not difficult at all. U.S. Transportation Department data annually presents the U.S./Canadian and foreign content figures for every auto and light truck model sold in America. As reported by a recent analysis of the figures:

Detroit has the bulk of cars with high domestic content. GM, Ford and Fiat Chrysler Automobiles build 37 of the 57 U.S.-assembled cars with 60 percent or higher domestic content. Foreign-based automakers are responsible for dozens of imported cars with zero percent domestic content, according to the National Highway Traffic Safety Administration [NHTSA]. Detroit automakers have just two cars below 5 percent….”

Finally, the authors express puzzlement that despite “the threat of auto tariffs….the foreign automakers who would be targeted by the tariffs are bolstering bolstering manufacturing in the U.S. with investments in auto plants across the Midwest and South.” To which anyone not infected with Trump Derangement Syndrome would respond, “Exactly.”

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(What’s Left of) Our Economy: New U.S. Pay Figures Show a Recent Fade – Especially in Manufacturing

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This morning the federal government released one of the more unusual takes on Americans’ pay that we regularly see – the latest quarterly report on “Employer Costs for Employee Compensation (ECEC).” It’s unusual because it measures not only wages and salaries, but non-wage benefits. And that’s something of a two-edged sword.

On the one hand, the ECEC series’ comprehensiveness provides a fuller picture of compensation trends in the U.S. labor market than the wage figures alone (which come out monthly, and therefore are somewhat more current). On the other, because it focuses (as per the name) on compensation from the employer’s end, it includes a great deal of info on practices that never translate into money in their workers’ pockets. After all, few if any workers realize the full value of their benefits packages.

The ECEC series presents analysts with another problem: the current-dollar data only go back to 2004. So it’s not possible to compare the economy’s performance on this front over similar phases of the various recent business cycles.

Even so, three important conclusions can be drawn from the latest data – which takes the story up to full-year 2018. First, they confirm what the wage statistics reveal about manufacturing being a compensation laggard during the current economic recovery compared with the rest of the private sector (I exclude government employee data from this post because compensation decisions in the public sector are set mainly by politicians’ decisions, as opposed to market forces. As a result, they say relatively little about the fundamental state of the economy.)

Second, they show that for both private sector (PS) workers as a whole and manufacturing workers, wages and salaries have been growing more slowly than benefits. And third, they show that increases in all these forms of compensation for both private sector and manufacturing workers slowed somewhat during the second year of the Trump administration, and that the improvement for manufacturing workers essentially halted the year before – and in some cases, shifted into reverse.

Here are figures for compensation cost changes for the duration of the current expansion – which began in mid-2009:

Total compensation for all PS workers:                     +24.18 percent

Total compensation for manufacturing workers:       +21.97 percent

Wages and salaries for all PS workers:                      +23.00 percent

Wages and salaries for manufacturing workers:        +20.59 percent

Total benefits for all PS workers:                              +27.18 percent

Total benefits for manufacturing workers:                +24.56 percent

If you do a little more math, you’ll see that private sector compensation costs generally advanced at a rate 10.06 percent faster than total compensation in manufacturing; that private sector wages and salaries costs went up 11.70 percent faster than their manufacturing counterparts; and that benefits costs rose 10.67 percent faster.

Now let’s look at the annual changes in each variety of compensation costs since 2009. The figures show changes between the fourth quarters of each year, and if you look at the 2016-17 data and the 2017-18 data, you see the growth slowdowns and actual backsliding in manufacturing mentioned above.

            PS comp   mfg comp   PS wages  mfg wages  PS bens   mfg benefits

09-10:   +1.20%    +0.94%      +1.18%     +0.14%     +1.38%     +2.52%

10-11:   +2.95%    +2.20%      +2.55%     +1.60%     +3.95%     +3.37%

11-12:   +1.05%    +1.79%      +0.89%    + 2.13%     +1.42%     +1.15%

12-13:   +2.63%    +4.83%     +2.17%     +4.08%      +3.74%     +6.28%

13-14:   +5.70%    +4.52%     +4.62%     +4.36%      +8.23%     +4.84%

14-15:    +1.21%   +4.82%     +1.93%     +4.30%       -0.31%     +5.79%

15-16/;   +3.34%   +2.16%     +3.12%     +2.56%      +3.76%     +1.41%

16-17:    +2.93%    -0.89%     +2.80%      -0.74%      +3.22%     -1.77%

17-18:    +0.98%    +0.28%    +1.62%     +0.63%      -0.49%      -0.44%

Another noteworthy characteristic displayed by these numbers: They can be very volatile. For optimists, this choppiness may be a sign that manufacturing compensation will turn another corner, and that overall private sector compensation will rise at an accelerating rate. They could also explain the relatively weak manufacturing results as a sign that, as has been widely claimed and that I’ve discussed previously, that industry is attracting job-seekers whose qualifications are so threadbare that they can’t command premium wages and benefits even in the currently tight national labor market.

Pessimists can counter by contending that recovery-era compensation increases have surely peaked, either since the expansion will surely peter out soon simply because it’s already lasted so long, or because the boost received from the President Trump’s tax cuts has run its course, or both.

I’ll stay agnostic for now. But I feel pretty confident that if you look at the ECEC figures that start coming out in mid-2020, you’ll have a decent idea of who America’s next president will be.

Making News: Detailed Breitbart Report on Last Week’s Globalism Radio Interview

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I’m pleased to announce that that “Breitbart News Tonight” radio interview of mine last Friday on the recent Washington Post tome defending globalism was featured today on the Breitbart “print” website.  You might be especially interested in this detailed summary by Breitbart reporter John Binder in part because his piece seems to have generated lots of buzz in social media – and lots of traffic for this blog.

All the more reason to keep checking in with RealityChek for news of upcoming media appearances and other developments.

Im-Politic: Why White Supremacist Terrorism has Become a Top Priority Threat

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The great 20th century economist John Maynard Keynes is widely thought to have said in response to a challenge to his consistency, “When the facts change, I change my mind. What do you do?…” I’ve always thought that’s great advice in life generally, and in particular for anyone who spends much time commenting on public policy. As a result, I have no problem reporting that my views on the seriousness of the white nationalist/supremacist violence threat nationwide and globally are different now than when I last wrote on the issue a little over three years ago. Moreover, it’s clear that President Trump needs to get off the dime on this front as well.

Specifically, it’s now clear to me that these movements have developed into dangers to public safety that are comparable, or nearly so, to Islam-inspired terrorist movements, and that other national governments need to intensify their focus accordingly.

The proximate cause of course is Friday’s terrible massacre of Muslims at two mosques in Christchurch, New Zealand. But the past year has also witnessed a mass shooting at a Pittsburgh, Pennsylvania synagogue, the letter bombs sent by a Florida man to Democratic Party politicians and officials as well as liberal mainstream media figures, and the arrest of a Coast Guard officer who was apparently stockpiling weapons with the intent of killing lots of liberal political figures and journalists.

My previous views on the differences between white nationalist (I know it’s a logically tortuous term, but it’s in widespread use, so….) violence and Islamic terrorism were based mainly on two observations: First, that, unlike the latter, the former had no general program (however loony in real-world terms) that it tried to push; and second, that unlike Islamic terrorists, the white nationalists didn’t seem to have an international network from which they could draw strength, inspiration, and even resources.

It’s now clear, however, that the Islamophobic, anti-immigrant hatred behind much white nationalist violence is motivated by a determination to stop what these extremists view as an effort by globalist-dominated national governments to replace their countries’ historically white populations of European descent with Muslims and other foreign non-whites. Some of this “Great Replacement” thinking (I hesitate to dignify it as anything as systematic as an “ideology”) of course also justifies anti-semitic violence by evoking the long-held belief that Jews are crucial members, and indeed masterminds, of a transnational (usually called “cosmopolitan” conspiracy to control all of humanity by dissolving all existing bonds among individuals, ethnic groups, and national populations and imposing a form of tyrannical world government).

Moreover, like jihadists, white nationalists undoubtedly the world over increasingly are using social media to talk to one another, share their poisonous bigotry, and whip themselves into a frenzy. As a result, it’s just as pointless to try distinguishing the two by contending that jihadists appear much more organized globally than white nationalists. It’s true, for example, that white nationalists haven’t demonstrated the ability to turn large chunks of physical territory into bases capable of promoting large-scale terrorist operations like September 11. But it’s also true – as noted by many alarmed by jihadism – that such capabilities aren’t needed for Islamic radicalism to deserve blame for inspiring “lone wolves” to go on terrorist rampages.

It’s also true, as far as we know, that, unlike the jihadists, white nationalists haven’t yet been able to foster the creation of and maintenance of cells that can carry out large-scale terror attacks like those Europe has suffered in Paris and Brussels. But why sit back and wait for this capacity to develop?

So President Trump obviously needs to stop denying that white nationalism is a burgeoning security threat. White nationalists may indeed be “a small group of people that have very, very serious problems,” but there’s now no doubt that however sparse their numbers, white nationalists can do tremendous harm. He also needs to stop committing the entirely unforced error of reacting to anti-Muslim terrorism in the blandest possible ways (when he reacts at all) while greeting violence by Islamic radicals with instant outrage.

But let’s also be clear about what burgeoning white nationalist violence doesn’t mean. Principally, it doesn’t mean that Mr. Trump and his rhetoric are responsible (unless you want to hold Never Trump-ers and their extreme rhetoric responsible for antifa-type violence). And it doesn’t mean that Islam-inspired terrorism can or should be downplayed – including with all that implies for policies toward immigrants and refugees from countries where reliable vetting information simply doesn’t exist. 

Instead, it means that we live in a depressingly and dangerously complicated world in which perils can come simultaneously in many different forms; in which governments need to target them all; and in which people of genuinely good will urgently need to realize that what they have in common, and what separates them from the violent fringes, is far more important than what divides them. Mr. Trump could help greatly by recognizing that his entirely correct claim that “to solve a problem, you have to be able to state what the problem is or at least say the name” applies to white supremacist terrorism as well as the Islam-inspired kind.

Making News: Podcast On-Line of a New National Radio Interview on Globalism…& More!

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I’m pleased to announce that a podcast of a national radio interview from last night is now on-line.  Conducted by the folks at Breitbart News Tonight, it addresses the wide range of issues raised by a (revealingly) humongous article by Robert Kagan defending globalist approaches to domestic and foreign policy (and singling out nationalism as a particular evil) that appeared yesterday in the Washington Post.  Go to this link and click on the March 15 entry with my name for a fascinating conversation that literally has it all – politics, world affairs, economics, history,  philosophy, and more!

Also, it was interesting, to put it mildly to be described as “anti-China” in this article from the Hong Kong-based South China Morning Post by an author who “researches and writes about global, regional and Hong Kong challenges from a Hong Kong point of view.” Hong Kong, you’ll recall, is now controlled by China, and although Beijing has permitted the locals to maintain a modicum of free expression and self government, the range of permitted liberties keeps narrowing all the time.

For the record, I’m perfectly fine with the Chinese people in general, and with much of Chinese culture.  But the country’s government and leaders?  Not nearly so much

And keep checking in with RealityChek for news of upcoming media appearances and other developments.

 

(What’s Left of) Our Economy: The Fed Just Showed that Tariff Alarmism Needs to Wait (At Least) Another Month

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The Federal Reserve’s new industrial production figures (for February) follow a pattern that’s begun to emerge lately. They provide evidence that the domestic U.S. manufacturing sector is shifting into a slower gear. But they offer scarcely any reason to believe that President Trump’s tariff-centric trade policies are behind this possible soft patch.

As usual, let’s start with the data pertaining to the President’s levies on aluminum and steel. These tariffs have been widely reported to have gut punched American industry – allegedly proving that Mr. Trump’s approach to trade has been totally counterproductive. Yet just as usual, the performance of the nation’s main steel-using industries – supposedly the main victim of the tariffs, since the trade curbs saddled them with extra costs for major inputs they use – utterly demolishes such claims.

The table below shows the inflation-adjusted output changes for U.S. manufacturing as a whole and for the leading metals-using sectors. And the time periods of the columns represent the gains or losses reported last month between April (the first full month the metals tariffs were in place) and January; the revised April-January figures released this morning, and the preliminary April-February statistics also put out today.

The message they send couldn’t be clearer. The overall manufacturing slowdown comes through from the deterioration that took place between the April-January and April-February results. In fact, on a monthly basis, real manufacturing output declined by 0.40 percent in February – a weakening that followed a 0.49 percent drop in January.

The metals-using industries (including the durable manufacturing super-category in which they’re all found) all exhibited weaker sequential performance between January and February, too (except for aircraft and parts). But with the exception of autos and parts, and major appliances (which are also laboring under the burden of a separate tariff on large household laundry machines imposed in late January, 2018), since the onset of the metals tariffs, they’ve all grown faster than manufacturing as a whole (which is included as a control group since it contains many sectors that don’t use especially large amounts of metals).

Even more revealing are the differences between the old and new January figures. In every case – including for the laggards – they’ve been revised considerably higher. So their underlying strength still looks impressive, which would make no sense whatever if they were really suffering terribly from the metals tariffs.

                                                   old thru Jan.      new thru Jan.         thru Feb.

overall manufacturing:            +1.20 percent      +1.15 percent    +0.75 percent

durables manufacturing:          +1.65 percent     +1.88 percent    +1.78 percent

fabricated metals products:      +3.19 percent     +3.35 percent    +3.30 percent

machinery:                               +3.87 percent     +4.63 percent    +2.67 percent

automotive:                               -5.18 percent     -3.78 percent     -3.87 percent

major appliances:                      -2.87 percent     -1.42 percent     -1.79 percent

aircraft and parts:                     +6.35 percent    +7.22 percent    +7.98 percent

Because the Trump China tariffs didn’t begin until August, their impact on domestic American industry is much less clear. In addition, the list of goods on which levies were imposed doesn’t compare well with the industrial production figures because they use different systems for classifying manufacturing sectors. Finally, the number of Chinese import categories tariff-ed in starting in August was relatively small – only $50 billion worth.

The table below presents results from industries where the matchups look solid. This time, I’ve added a column that permits comparing the old and new data for the previous month. And as you can see, the numbers are all over the place. The February figures look especially ugly. But in two cases, the January output results have turned out to be stronger than previously reported (especially in industrial heating equipment).

                                                      old Aug.-Jan.      new Aug.-Jan.      Aug.-Feb.

overall manufacturing:                +0.36 percent      +0.31 percent     -0.09 percent

ball bearings:                                -0.09 percent      +0.05 percent     -0.10 percent

industrial heating equipment:       -3.86 percent      -0.40 percent     -4.17 percent

farm machinery and equipment:  +9.12 percent     +9.12 percent   -12.70 percent

Even here, however, so much volatility is evident that withholding judgment is the best approach for now. For example, the February monthly decrease in after-inflation farm machinery output (twenty percent even) was that sector’s worst such performance since January of 2007 (20.54 percent). That’s a more than twelve-year low. Yet the (unrevised) 6.47 percent monthly production improvement in January was the best since last April’s 13.69 percent. Similar volatility can be seen in industrial heating equipment.

So the trade alarmists will have to wait at least another month at least for convincing evidence that the Trump tariffs have backfired big-time against domestic industry. Not that’s stopped them from spreading this wholly false narrative till now.

(What’s Left of) Our Economy: A Deep Dive Doesn’t Find Any Tariff-Led Consumer Inflation, Either

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I decided to do something special for my regular analysis of the new U.S. consumer inflation figures (for February) and what they say about President Trump’s tariff-centric trade policies. Mainly because we now have four months worth of data on the prices of goods sectors where imports from China are common, it’s become possible to take the best stab yet determining whether the Trump levies are hammering American households by making these products much more expensive.

The verdict? Some tariffs-led inflation here can be detected, but the statistics are still too imperfect, and the time-frame examined still too short to justify any firm conclusions.

At the same time, it remains clear that Mr. Trump’s metals tariffs, which have now been in place for eleven data months, have had little if any impact per se on consumer buying power.

Let’s examine the steel- and aluminum-related figures first, since there are many fewer products involved. Here are the data for the January-February period, and for April to the present (the stretch during which the metals tariffs have been in place), as well as the year-on-year numbers for April and February (which provide some indication of trends over time). As usual, the results for tariffs-affected products (e.g., canned foods) are presented along with those of control goods (e.g., non-canned foods) to glean further insights into the tariffs’ effects.

But here’s another new wrinkle: Rather than use the most popular “core inflation” measure for the biggest control group, I’m going to use a different measure: all items minus energy. The reason? The standard core inflation gauge strips out food and energy, because price changes in those categories are so volatile that they’re thought to distort the picture of fundamental inflationary or deflationary forces influencing the economy.

Yet many metals tariffs-affected products are food products. So for our purposes, the core group needs to be more narrowly drawn – and in this case, is comprised of all items minus only energy.

                                       Jan.-Feb.        Since April       April y/y          Feb. y/y

core CPI:                   +0.15 percent   +1.76 percent  +2.01 percent   +2.07 percent

fresh fruits                 +0.72 percent   +1.95 percent   -0.43 percent   +2.34 percent

  & vegs:  

fresh fruits:                 -0.27 percent    -0.55 percent  +1.38 percent   -0.53 percent

fresh vegs:                 +1.86 percent   +4.92 percent   -2.50 percent  +5.76.percent

processed fruits         +1.42 percent   +0.11 percent   -1.29 percent  +0.88 percent

  & vegs:

canned fruits              +2.12 percent  +3.07 percent   -0.14 percent  +3.99 percent

  & vegs:

canned fruits:             +2.48 percent   +1.91 percent    -1.60 percent  +3.09 percent

canned vegs:              +2.23 percent   +3.70 percent   +1.00 percent  +4.66 percent

soups:                         +0.39 percent  +1.19 percent     -0.38 percent   -0.57 percent

malt beverages           +0.73 percent  +2.41 percent    +0.84 percent  +2.64 percent

  consumed at home:

alcoholic                     -0.26 percent   +1.14 percent   +2.17 percent   +1.36 percent

   beverages consumed away:

non-frozen, non-        +0.98 percent   +3.46 percent   -0.52 percent   +3.52 percent

  -carbonated non-

  alcoholic rinks:

carbonated drinks:      -0.19 percent   +4.72 percent   +0.04 percent   +5.04 percent

juices & non-             +0.98 percent   +3.46 percent    -0.26 percent   +3.52 percent

  alcoholic drinks:

new cars & trucks:     -0.24 percent    +0.66 percent   -1.61 percent   +0.29 percent

motor vehicle             -0.09 percent    +1.83 percent   -0.74 percent   +2.12 percent

  parts:

appliances:                 -0.94 percent   +3.44 percent  +0.27 percent    +6.80 percent

major appliances:       -0.56 percent   +6.86 percent  +1.55 percent  +11.08 percent

non-electric               +0.25 percent    -0.59 percent   -1.57 percent    +1.69 percent

  cookware & tableware:

tools, hardware,         +0.72 percent  +1.49 percent   +0.19 percent   +1.98 percent

outdoor equipment:

Something that becomes clear right away – the food price changes shown here demonstrate that they really are volatile. For example, from January to February, fresh fruits and vegetables prices together rose by 0.72 percent. The previous month, they fell 0.19 percent. Fresh vegetables prices have been on an even wilder roller-coaster – up 1.86 percent on month in February, down 1.66 percent on month in January. And unfortunately, this volatility can reduce the value of the year-on-year results.

The canned foods price volatility is impressive, too. Between January and February, the prices in the canned fruits, canned vegetables, and canned produce overall categories all rose more than two percent. But between December and January, the price of the first of these fell by 1.59 percent, the price of the second rose by just 0.45 percent, and the price of the third dipped by 0.05 percent.

And these products are where the strongest signs of metal tariffs-led consumer price inflation are found. So take the price acceleration revealed by the year-on-year data with a grain of salt. (No pun intended.). Also revealing: When you look at the cumulative price changes since the first metals tariffs were imposed (the post-April figures), some of these canned food categories exhibit stronger-than-core inflationary trends (the canned produce groupings and the drinks categories – which unfortunately also include many products packaged in glass and plastic bottles and cardboard containers) but some exhibit weaker pricing (like soups and alcoholic beverages consumed away from home – which also include many non-canned products). So there’s also abundant evidence that prices are mainly driven by something other than the metals in cans.

As for other products that use steel and aluminum, appliance prices keep increasing ever faster – but of course inflation in those categories has also been influenced by a separate set of tariffs imposed a year ago on large household laundry machines. The pricing trends for motor vehicles, automotive parts, non-electric cookware and tableware, and the tools and hardware categories, are decidedly mixed – which again undercuts tariff-centric interpretations of their inflation rates.

And now for the China tariffs’ effects. In part this post has been delayed because I actually went through the list of tariff-ed consumer (and other) goods published by the U.S. Trade Representative’s office in mid-September. The groupings of these products still often match up poorly with the groupings used by the Labor Department to track consumer pricing trends. Moreover, in many of these cases (especially the food products), imports from China are pretty modest. But the groupings aren’t entirely off, so I concluded these numbers are worth presenting.

What you see are the data for the latest month (February), for the post-September period (since October was the first full month these levies were in effect), and for October and February on a year-on-year basis. And as with the metals tariffs figures, the main control groups (like items minus energy) are presented as well.

                                     Jan.-Feb.          Since Oct.         Oct. y/y           Feb. y/y

core CPIU:              +0.15 percent   +1.76 percent   +2.01 percent   +2.07 percent

food:                        +0.40 percent   +1.17 percent   +1.21 percent   +1.96 percent

frozen/freeze-          +1.56 percent   +0.47 percent    -0.46 percent   +0.95 percent

  dried/prepared

  foods

fish/seafood:            +0.79 percent   +1.85 percent   +2.82 percent   +4.44 percent

processed fish/         +0.41 percent   +0.92 percent   +1.46 percent   +5.21 percent

  seafood

frozen fish/              +0.78 percent   +1.24 percent    -0.15 percent    +3.67 percent

  seafood

fruits/vegs:               +0.86 percent   +1.83 percent    -0.32 percent   +2.03 percent

fresh fruits/               +0.72 percent   +2.11 percent   -0.38 percent    +2.34 percent

  vegetables

fresh fruits:                -0.27 percent   +1.29 percent   -1.40 percent    -0.53 percent

fresh vegs:                +1.86 percent   +3.05 percent   +0.81 percent   +5.76 percent

processed                  +1.42 percent   +0.79 percent   -0.06 percent   +0.88 percent

  fruits/vegs:

frozen fruits/             +0.81 percent   -0.51 percent    -2.72 percent    -2.41 percent

  vegetables

non-carb,                  +0.98 percent   +2.06 percent   +1.23 percent   +3.52 percent

  non-frozen juices/drinks:

personal care            +0.55 percent   +0.91 percent    +1.52 percent   +1.87 percent

  products:

household                +0.31 percent    +0.78 percent    +0.69 percent   +1.49 percent

  furnishings:

recreation                 -0.86 percent    +0.53 percent     -3.51 percent    -1.38 percent

  goods:

men’s                       +3.27 percent     -1.52 percent    +1.47 percent   +4.10 percent

  sportswear:

women’s                   -2.51 percent     -2.47 percent     -5.08 percent   -5.91 percent

  sportswear:

computers,                -0.94 percent    -1.70 percent     -4.09 percent    -3.95 percent

  peripherals, etc.:

window/floor            -1.97 percent    -2.39 percent    +0.74 percent    -3.53 percent

  coverings:

furniture &               +1.20 percent   +1.22 percent    +1.26 percent   +2.36 percent

  bedding:

appliances:                -0.94 percent    +0.17 percent   +4.82 percent    +6.36 percent

major                         -0.56 percent    +1.83 percent  +8.08 percent  +11.03 percent

  appliances:

misc appls:                -0.85 percent     -1.04 percent  +3.25 percent    +4.38 percent

non-electric              +0.25 percent    +0.27 percent   -0.51 percent    +1.69 percent

  cookware/tableware:

tools/                        +0.72 percent     +1.91 percent  +0.39 percent    +1.98 percent

  hardware &

  outdoor equip:

household                 +0.13 percent    +0.41 percent  +1.79 percent    +2.94 percent

  cleaning products:

televisions:                 -3.23 percent   -7.01 percent  -17.95 percent   -20.18 percent

misc video                 +0.71 percent  +4.45 percent    -3.87 percent    +1.53 percent

  equipment

pets &                       +0.55 percent   +1.50 percent   +0.91 percent   +2.84 percent

  pet products

sporting                     -1.90 percent    +2.02 percent   +1.71 percent   +0.30 percent

  goods

photo equip               -2.26 percent     -1.24 percent    -4.94 percent    -4.12 percent

  & supplies

sewing                      +1.82 percent    +9.76 percent    -2.08 percent   +6.10 percent

  machines/

  fabrics

motor vehicle            -0.09 percent    +1.03 percent   +1.25 percent   +1.86 percent

  parts:

tires:                         +0.25 percent     +1.66 percent   +0.03 percent   +0.91 percent

stationery/                +1.60 percent     +4.24 percent    -6.48 percent    -0.22 percent

  gift wrap

Again, the short duration of these tariffs means that even the post-October and year-on-year results should be treated with major caution. And the prevalence of faster-rising food prices is clear from the table as well (although the modest level of tariff-ed imports from China further undermines the claim that trade deserves significant blame). Another complication that explains many of the diverging metals-related results, too: Different products operate in very different markets with highly distinctive features – including demand. Just look at the sportswear categories – where by most measures, pricing for men’s products is moving in exactly the opposite direction as pricing for women’s products.

The bottom line seems to be that, for price changes starting in October, only five of these 23 categories show increases above the core inflation rate, while 18 show below it. And one of those high inflation products was the major appliance category that’s also been affected by the washing machine tariffs.

Yet for year-on-year inflation rates, between October and February, the story looks very different. Price rises sped up (or price drops slowed down) in 18 of the categories, with greater price weakening characterizing the other five.

That’s why I believe that it’s still most responsible to adopt a wait-and-see approach to evaluating the China tariffs – along with the short time frame involved and the uncertainties over categorization. For the impact of the longer-lasting metals tariffs, however, claims of trade war-wreaked devastation just look even more and more far-fetched with each passing month.

Making News: Podcast On-Line of Last Night’s National Radio Trade War Interview

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I’m pleased to announce that the podcast is now on-line of my interview last night on John Batchelor’s nationally syndicated radio show on the U.S.-China trade conflict.  Click here for a great 5-way discussion (!) involving John, co-host Gordon G. Chang, me, plus some surprise participants!

And keep checking in with RealityChek for news of upcoming media appearances and other developments.

 

Following Up: Back Indeed on National Radio Tonight Talking China!

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I just got the word that I will indeed be appearing tonight on John Batchelor’s nationally syndicated radio show to update the U.S.-China trade war story with John and co-host Gordon G. Chang.  And the segment will focus in particular on my new piece for The National Interest on President Trump’s unmistakable but ragged progress toward the essential goal of disengaging the United States from China economically.

The interview is slated to begin at 10:15 PM EST, and you can listen live on-line at this link.  As usual, if you’re not able to tune in, I’ll be posting a link to the podcast as soon as one’s available.

And keep checking in with RealityChek for news of upcoming media appearances and other developments.

 

Making News: A New Op-Ed on Trump China Policy…& Back on National Radio Tonight?

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I haven’t been posting as much lately as usual, in part because I’ve had to fulfill some outside writing commitments.  So I’m especially pleased to report that one of these assignments was just posted by The National Interest.  The article explains why, despite his chaotic approach, President Trump remains likely to win the trade conflict with China, and can be read at this link.

In addition, it’s possible that I’ll be returning tonight to John Batchelor’s nationally syndicated radio show tonight to help provide an up-to-the-minute update on the u.S.-China trade talks.  John’s travel schedule is apparently creating some uncertainty for his producers, and I’ll let you know as soon as I can if I’ve gotten the green light.  And if my notice is too short, I’ll of course post a link to the podcast forthwith.

Right now, I’m heading back to a deep dive I’m doing on the impact of the President’s China tariffs on imports of goods from China.  I hope I’ll be able to wrap it up in time to post tomorrow.  For the time being, though, keep checking in with RealityChek for news of upcoming media appearances and other developments.