Donald Trump recently had two very good reports hit that have convinced him that he is headed down the right path.
When the most recent inflation report was released, the number came out at 2.7%, about 0.4% better than experts had predicted.
The inflation-adjusted economic scorecard was also just released at 4.3%, and Trump could not be happier.
Releases of all of the numbers were delayed because of the government shutdown, but when they did emerge, they were far better than expected.
Inflation had been predicted to come in at 3.1%, but the 2.7% reported was significantly lower than estimated, with Trump claiming that inflation had been “stopped.” That was a bit of an exaggeration, but this was still good news for the president.
Kevin A. Hassett, the director of the White House National Economic Council, was a bit more realistic about the news, stating, “I’m not saying we’re going to declare victory yet on the price problem, but this is just an astonishingly good C.P.I. report.”
But Trump is facing a problem that will start to surface over the next few months. Stockpiles accumulated before the tariffs were put in place are just about to be exhausted across the board. When the tariffed goods go to the shelves, there will be significant increases in pricing. So, just be ready to see a much different report next year.
Trump also got great news on the economy, with the gross domestic product (GDP) announced at an impressive 4.3%.
White House spokesman Kush Desai stated, “Today’s blockbuster, expectation-smashing GDP report is the latest proof that President Trump’s America First trade and economic agenda continues to turn the page on the Biden economic disaster: American consumers are spending, and American exports are surging.”
He continued, “President Trump built the greatest economy in the world in his first term, and he’s in the process of doing it all over again. Americans can count on benefitting from a historic economic boom in 2026.”
Again, great news for Trump, but we all still base our assessment of the economy on our bank accounts, and many Americans are still hurting on that front, including this author, who continues to see a red number every month and has for the last five years. That has yet to change.
Trump is giving his tariffs all the credit for the good news, but that is a dangerous route to take due to what we mentioned above in terms of goods about to hit the shelves that will soon reflect tariff pricing.
The president stated, “The TARIFFS are responsible for the GREAT USA Economic Numbers JUST ANNOUNCED…AND THEY WILL ONLY GET BETTER! Also, NO INFLATION & GREAT NATIONAL SECURITY. Pray for the U.S. Supreme Court!!!”
Trump has also hinted at sending out tariff revenue checks to Americans, but I think that is a bad move on several fronts. First, I think it is trying to buy votes as it will be conveniently timed with midterms (my guess). Second, our nation is staring down the barrel of a $40 trillion debt, so how about we pay off the debt to keep the country stabilized rather than trying to bribe voters?
The other reason for concern, as noted, is that there is likely to be a slowdown after the holiday season is over. Regardless of their financial situation, people still tend to spend at Christmas, then figure things out after the fact. My guess is that we will see a major slowdown after the new year, especially once those tariffed goods start to go up on the shelves at much higher prices.
