The consumer price index rose a seasonally adjusted 0.2% for the month, putting the 12-month inflation rate at 2.3%, its lowest since February 2021.
- Core CPI also increased 0.2% for the month, while the year-over-year level was 2.8%.
- Egg prices tumbled, falling 12.7%, though they were still up 49.3% from a year ago.
- While the April CPI figures were relatively tame, the Trump tariffs remain a wild card in the inflation picture, depending on where negotiations go between now and the summer.
Who would have guessed corporations would get less greedy with a rich man in the White House? :-)
The last little dig makes it sound as though the higher tariffs will make a big difference. That depends. If you studied economics you doubtless remember elasticity of demand. If a good is not essential or not terribly important to buyers an increase in price will reduce demand for it. Think of badly made, badly sized Chinese clothing, toys for kids who already have rooms full of unused toys, electronic toys for adults. I am sure there many other examples.
If the price of these increases 40%, demand will fall. The amount demand falls depends on the elasticity of demand. A 40% reduction in demand (extreme but not impossible) might have no inflationary results. Those same products offered by a lower tariff country might cause no price change at all. If made in USA (like those carbide endmills mentioned yesterday which are already competitively priced) might also cause no real change.
If you rely on antisocial media and your friends are repeating DNC talking points, your reality may differ, at least in that bubble.
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