Based on residential investment construction July release (starts 1.428 mn > 1.29 mn Bbg consensus; permits 1.354mn < 1.39mn Bbg consensus):
EJ Antoni in August: “…an increasing number of indicators say the recession has arrived in the broader economy.”
trillions of dollars that appear to be economic growth are just borrowing from the future — a debt that will eventually have to be repaid with taxes or inflation. Both will kill growth.
“Reserves, Sanctions and Tariffs in a Time of Uncertainty”
Is gold supplanting the dollar? Did the use of sanction by the US reduce holdings of dollars by targeted central banks? Did the 2018-19 tariffs reduce holdings of dollars by countries hit with Section 232 tariffs? Jeff Frankel, Hiro Ito and I address these questions in a new paper.
Coffee Drinkers of America, Unite
Here’re the July PPI and CPI for coffee.
WSJ Op-Ed on Implications of EJ Antoni’s Views on Inflation
From Bunn and Pomerleau/Tax Foundation, “Will E.J. Antoni Raise Your Taxes?”:
Every year the IRS adjusts more than a dozen tax thresholds to account for inflation, a process called indexing. In 2020 the 10% tax bracket applied to income up to $9,875 for single individuals and $19,750 for married couples. Thanks to inflation indexing, those thresholds are now $11,925 and $23,850, respectively.
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PPI => CPI?
With the outsized jump in the PPI, the natural question to ask is whether this implies a jump in the CPI. The evidence is mixed in terms of the aggregate PPI and the aggregate CPI, as noted in this post. More recent analyses suggest the PPI contains predictive power.
What’s the Defense for Antoni’s Nomination?
Exactly that he doesn’t have citations! From Daily Signal:
President Donald Trump was right to fire BLS Commissioner Erika McEntarfer, a Biden appointee, for these mistakes, even if they were the result of systemic flaws, not partisanship. Antoni, whom Trump nominated as her replacement on Monday, can restore integrity and precision to our most critical economic data agency.
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Wisconsin under Trump Trade War 2.0
Manufacturing employment, exports declines. Employment release from DWD today.
A Man Who Believes We’ve Been in Recession since 2022 Is Still Odds on Favorite for BLS Commissioner
It’s really a statement on our times.
Michigan Survey: Sentiment Down, Inflation Expectations Up
Preliminary readings for August. Not particularly good.