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Tariffs, jobs, & more
Here’s a helpful way to conceptualize the impacts of Trump’s tariffs. Let’s assume they reduce GDP growth by one percentage point per year. The U.S. economy was expected to expand about 2.4% this year. So instead it would grow 1.4%. That’s not even a recession, just slower growth. Who cares, right?
Well, if U.S. GDP growth had been one percentage point slower each year since 1960, we’d currently have the same living standards as Panama.
Growth matters, and this is a shockingly anti-growth policy that will make Americans materially poorer both in the short- and long-run. There’s a reasons markets are plunging.
I know they refer to these things as tariffs, but make no mistake, they are taxes. We just massively increased the tax burdens on American business. Sorry, that’s not great for growth, competitiveness, American exceptionalism, households, profits, etc.
Beyond being liberated from a large portion of our retirement accounts, this week was loaded with economic data releases including on construction spending, jobs (read Zack’s post here), and a lot more.
You can also read our initial 31 Thoughts on Tariffs post from yesterday, free for all subscribers.
Monday
Gas Prices & Diesel Prices
Gas prices increased to $3.29/gallon this week. Gas prices typically rise throughout spring, but oil prices have tanked in response to tariff announcements and expectations for softer global economic growth, so it’s unclear what will happen over the next few months. I suspect global oil prices will head lower.
www.sageecon.com
Diesel prices inched slightly higher, up to $3.59/gallon, but are still pretty low by recent standards.
TSA Checkpoint Travel Numbers
Air travel has fallen back below 2024 levels over the past week, according to TSA data. Not a great sign for consumer spending momentum. It’s been a while since I met a Canadian in America.
Tuesday
Construction Spending...
