CPI deflated and using AIER “Everyday Price Index”:
Figure 1: Average hourly earnings deflated by CPI (blue), by AIER’s “Everyday Price Index” (EPI) (red), both in January 2025$. April CPI is from Cleveland Fed nowcast of 5/11; AIER EPI for April is obtained from a 2023M04-2026 regression of log first differences of EPI on gas prices. Source: BLS, EIA via FRED, AIER EPI, and author’s calculations.
The EPI-gas price regression has an adjusted R2 of 0.87, SER of 0.002, with a statistically significant coefficient of 0.10 (each 1% increase in gasoline prices is associated with a 0.1% increase in the AIER EPI).
Former CEA chair Jared Berstein has more on the “vibe” aspect of earnings.
Okay, everyone is wondering why consumer sentiment is so low and of course Kevin Hassett has the answer:
WH chief economist Kevin Hassett was asked on CNBC why consumer sentiment just hit a record low in the US: “Trump has sort of taken every problem on Earth and gone 100% at fixing it. And I think that that can be stressful for people to see so much change going on.”
So there you have it. Trump is just doing so many great things at once that the public is absolutely dazzled into befuddlement.
I have an idea. Just pass out to the public whatever drugs Hassett is on and sentiment for everyone should improve.
Could Hassert and Bruce Hall be the same person
“…gone 100% at fixing it” until he loses interest.
Housing shortage? Inflation? Replacing Obamacare with something better? Bringing factory jobs home? Taking over Venezuela? Ending the war in Ukraine? Releasing the Epstein files? Infrastructure? So much fixing.