(June 2025) U.S. inflation rises 0.1% in May from prior month, less than expected

I can’t believe you clicked on that…
Ewww

 

Your question is about my emotions. Seriously.

Since my emotions are your concerns, I'd be thrilled to talk about the effects of tariffs on demand and their complex relationships with prices. You want to talk about my emotions. So nice try to turn your obsession around.

Prices go down from increasing supply or decreasing demand. As of now, the data is showing decreasing demand, not increasing supply. We are seeing relatively slow increases in price during a time of falling demand. If the data changes, then we will see what happens.

 

But, but, but wait a minute, inflation is just around the corner. (chuckle)

 

Go ahead and laugh. Most experts didn't predict the tariffs to take full effect until June/July. And today's report looks only through May. As this article puts it:

Trump's tariffs may have contributed to the rising price of some goods in May, such as appliances and toys. But overall goods prices held steady last month. Forecasters expect the cost of tariffs to become more evident in the months to come.
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Of course, the inflation may never come to full fruition. But that's because we may already be in a recession and prices aren't spiking because demand is falling. And as stated before, an increase in supply or a drop in demand will cause prices to drop. While overall, we have yet to see any dramatic shift in spending, the sentiment out there is it too is just starting. Here's a good report from McKinsey if you are interested in consumer spending sentiment.

Of course, if TACO Trump continues to chicken out, then who knows what the future holds. Trump went from 160% tariffs on China to start and just agreed, in principle, to 10%.

 

Retail sales fall by 0.9% in May. Demand effects starting to bite. Hit the auto markets hardest, where the tariffs are currently the most severe.

https://www.reuters.com/business/retail-consumer/us-retail-sales-fall-sharply-may-2025-06-17/

 

It would be funny if you weren’t so damned predictable.

 

Wait, you are mad because I said something and it turned out to be correct in the end? Crazy.

 

You’re never right about anything.
And that’s what is predictable.

 

That is weird. I predicted that the effect of tariffs would primarily be on a decline in demand blunting their inflationary impact but decreasing consumption. Then, retail sales show a sharp drop in spending in May following a small anticipatory drop in April. Seems like the data showed me entirely correct. And, thus far, you have been unable to provide any substantive explanation of how it was incorrect.

 

Are you sure spending doesn’t slow at the end of school year?
Seems like it might climb back up before the holidays…let’s see what happens.

 

All of these data are seasonally adjusted.

 

You're referring to drop in retail sales possibly a leader indicator of the Trump recession?

 

Prediction?

 

It's hard to celebrate the fact that an economic prediction was off by 0.01 percent, when grocery prices haven't changed. Seems like glomming onto relatively good news by one's fingertips, either because one is chronically optimistic, or because one knows the pain is coming, and it will be downhill from there.

I don't begrudge anyone a bit of sunshine on a cloudy day, though.

 

Hello! Zombie #1, reporting for duty! (there isn't a zombie emoji)

Why you so mean to md?

 

With the consumer drop of .9%, the fact that prices still rose is a daunting sign. With that significant of drop in demand, which was .2% worse than expected, prices should have remained constant, if not fell a little. Especially auto prices, which saw some of the biggest drops in demand. But they didn't, thank to Trump's tariffs.

And June numbers is when we should start seeing the bigger tariff effects. The bulk buying and "panic" buying of large ticket items like cars before tariffs took hold is over, and most businesses no longer have large pre-tariff stockpiles of goods, if they have any at all. We'll see when the June numbers hit, but wouldn't shock me if we see higher inflation and continued reduction in consumer demand.

 

If you have to ask, you wouldn’t understand.
No chance that poster is of the human kind.

 

Is he a...ZOMBIE?