Demystifying the economy | Inflation, what inflation?

We have been told that Donald Trump’s customs duties have been telling us will now be told prices and relaunch inflation. Moreover, But again last Tuesday, the results for the month of July showed only a very slight rise in prices. Nevertheless, Are all economists?

“The fears of a strong inflationary push caused by the increases in customs tariffs have not been materialized so far. Furthermore, ” admits the economist of the generous Francis.

It can be explained in several ways. Consequently, On the one hand. Therefore, there is a certain gap between what is happening demystifying economy | inflation, what in the real economy and what statistics reflect. Meanwhile, On the other hand, the American customs duties have been announced, modified, canceled or postponed by the president several times.

Some rights have applied for several months. but those that target all countries have only been in force since August 7, so that their impact on prices is not yet noticeable.

American companies have had a lot of time to prepare by increasing their imports. of products targeted to build up significant stocks. These reservations can allow them to maintain the profit margins without increasing prices for a while, but not forever.

Sooner. later, companies will have to decide to reduce their margin of profit or increase their selling prices to compensate for the increase in their costs due to customs duties.

More and more companies give the alert. Walmart has already announced price increases in its stores in the United States due to the increase in the. price of imported products. GM said that customs duties cost him 1.1 billion US in the last quarter. Nike expects customs duties to increase its costs by US 1 billion this year.

For the month of July alone, the United States government received 28 billion US of taxes on imported products. The higher price of all taxed imports will eventually be paid by American consumers. will be reflected in inflation statistics.

Demystifying economy | inflation, what

High increase in the PPI index

This upward pressure is already felt. The PPI (Producer Price Index) index, which follows who develops wholesale prices, increased from 0.9 % from June to July, its highest demystifying economy | inflation, what increase in three years.

The overall inflation rate in the United States remained stable in July. at 2.7 %, mainly due to the drop in gasoline. But the basic inflation data. the most volatile elements of which are excluded and which counts most for the American federal reserve, also point up. Basic inflation increased from 2.8 % in June to 3.1 % in July (see table).

Most economists therefore continue to believe that customs duties will increase inflation. that it is only a matter of time before the increase clearly appears in statistics and in the consumer portfolio.

“Perhaps the effects are more delayed than anticipated. the demystifying economy | inflation, what American economy presents us again its very great capacity for adaptation,” says the generous Francis economist.

Bets remain open.