Short Items of Interest—U.S. EconomyOptions Not Available The presumption behind a tariff imposition is that companies have options. The economic motivation behind a tariff or any kind of trade restriction is that its existence will push companies and consumers to do their purchasing elsewhere. The tariff is supposed to help a domestic producer com...

Short Items of Interest—U.S. EconomyNo Bang for the Buck Tariffs are a tool that many nations have used over the years, and some with great success. The primary rationale for the imposition of this tax on consumption is to offset an imbalance of some kind. Another nation is exporting its output to the U.S. because it can provide that good cheaper t...

Short Items of Interest—U.S. EconomyLittle Change in Inflation Threat The latest Producer Price Index shows a very modest hike of 0.1%, essentially indicating there is no increase in underlying inflation to worry about for the time being. This has been one of the more baffling aspects of the economy of late as there really should have been some pal...

Short Items of Interest—U.S. EconomyChanges in Business Motivation For decades, the motivation for business was fairly simple. The ideal location for an operation was one where costs would be minimized. This meant locating where wage rates would be lower, taxes would be minimal and raw materials would be accessible and cheap. If there was cheap ene...

Short Items of Interest—U.S. EconomyAnemic Job Totals As was widely expected, the job data was weaker this month as there were only 75,000 jobs. This is more anemic than had been anticipated (the estimate had been gains of around 150,000 to 180,000). The slowdown in hiring is not a big shock given the manufacturing sector has been slowing for month...

Short Items of Interest—U.S. EconomyTrade and Interest Rates The Federal Reserve had been pretty adamant about its interest rate policy until the last few months. The logic was sound enough. The economy has been performing quite well and that is generally the precursor to a bout of inflation. For the last several decades, the Phillips curve has bee...

Short Items of Interest—U.S. EconomyHigh Inflation Is Bad—So Is Low Inflation There is no doubt high inflation is a major economic problem. One of the core missions of the central bank is keeping a lid on these price hikes. In many ways, the high prices are more dangerous to an economy than is recession. Inflation that is too low is an issue as wel...

Short Items of Interest—U.S. EconomyMore Tariff Threats The imposition of tariffs has become the go-to strategy for the Trump administration—regardless of the issue. Distress over the trade deficit with China results in a set of stiff tariffs, irritation with European policy begets tariff threats and now the ongoing concern over immigration has Tru...

Short Items of Interest—U.S. EconomyConsumer Confidence Rebounds Earlier in the year, consumers looked worried about what was coming up and this was affecting their mood. Both the Conference Board and the University of Michigan surveys indicated a slump as consumers worried about trade wars, potential inflation threats and an end to job growth. The...

Short Items of Interest—U.S. EconomyMore Positioning? If there was any doubt that the trade war with China is really all about politics and posturing, the latest offers from the White House should dispel it. A few days ago, the Trump position on Huawei—the mammoth telecom company in China—was that it constituted a grave and imminent threat to natio...

Short Items of Interest—U.S. EconomyDebt Ceiling Blues Again Given that neither political party seems to have any interest at all in reducing the size of the debt and/or deficit, it should come as no shock to realize that the U.S. is once again running into the issue of the debt ceiling. The government will be unable to pay its bills by mid-summer ...

Short Items of Interest—U.S. EconomyStruggling Millennials By almost every measure, the Millennial generation is in the worst shape of any demographic cohort as they start to enter early middle age. They have less wealth, less property, fewer children, less longevity and seniority in their jobs and have less set aside for retirement. They have been...

Short Items of Interest—U.S. EconomyHow Much Damage Really? At the risk of sounding like an economist—it all depends. Tariffs are meant to change behavior (one of the basic missions of a tax). In this case, the aim is twofold. One desired outcome is a change in the way China does business; but there is more. There is also a desire to change the hab...

Short Items of Interest—U.S. EconomyReally Time to Understand What a Tariff Really Is We all know what a tax is. It is the only certain thing other than death, or so we are told. We also know that the powers that be go out of their way to figure out new ways to describe that eventuality—it is a "fee" or "revenue enhancement" or a "tariff." It is in...