Craig’s grasp of economics is voodoo shit

Slow-bleeding, tariff-driven ‘sneakflation’: 

US consumers are only just beginning to pay the cost of tariffs.

“Amore granular look at import price data indicates that there’s a slight dip in import prices from China; however, for the vast majority of countries, it’s basically been flat, Olu Sonola, head of US economic research at Fitch Ratings, told CNN in an interview.

“So that’s telling you that all of that is paid by importers,” he said. “It’s now a question of, is it the manufacturer, is it the retailers, or is it the small business that’s bringing it in? They now have to figure out, ‘How much of this can I take on, and how much of this will I pass on?”

“It’s very likely they will pass the bulk of it on,” he added.

To this point, consumers have been mostly shielded from starkly higher prices.

Through June, US consumers had absorbed 22% of tariff costs, but that share was expected to rise to 67% by October, according to an August 10 estimation from Goldman Sachs economists. That assessment led to a demand from Trump that the investment giant fire its chief economist.

Goldman Sachs economists said they expect that about 70% of the direct costs of the tariffs will eventually fall on the consumer, and that the total could rise to 100% if including the spillover effects of domestic producers raising their prices (something that has already occurred and is expected to continue — more on that below).

There’s a laundry list of reasons why tariff-driven price hikes are a slow boil: Businesses loaded up their warehouses with pre-tariffed goods; higher costs have been split by entities along the supply chain, lessening the blow at the retail store; and Trump’s fits-and-starts approach to tariffs has meant that the bulk of them did not go into effect for months, and many items are exempted (for at least now).

At the same time, inflation has remained relatively tame for both good and not-so-good reasons: Ongoing deflationary trends in key areas, marking a continued unwinding from pandemic-era shortages and price spikes; falling gas prices (they’re down 9.5% from July of last year) amid global economic uncertainty; and then because of depressed consumer demand in areas such as travel.

Still, recent Consumer Price Index inflation reports reveal increases in the cost of certain imports the United States relies on heavily, including household furnishings, linens, tools, toys and sporting goods.

As of August 8, imported goods cost 5% more than pre-tariff trends predicted and domestically produced goods are running 3% higher, according to newly released research from Harvard Business School professor Alberto Cavallo and colleagues.”