An economic advisory body within the White House has concluded that prices for imported goods have decreased this year, falling more rapidly than overall goods prices since February. The Council of Economic Advisers (CEA) released a report this month showing that, based on an inflation-tracking price index, tariffs have not accelerated inflation as some had predicted. The council analyzed the Personal Consumption Expenditure Price Index, which is closely monitored by policymakers and financial markets, and found that imported goods prices declined by 0.1% between December and May, while overall goods prices increased by 0.4% during the same period. This trend was consistent across various categories including core goods, durable items, and non-durable products. The CEA also examined the Consumer Price Index (CPI), another key inflation indicator, and found that imported goods prices fell by 0.8%, while total goods prices remained stable. The council emphasized that the consistency of findings across both PCE and CPI inflation measures reinforces the reliability of their conclusions. The White House has consistently disputed claims that tariffs imposed by former President Donald Trump would lead to higher inflation. In April, when Trump announced tariffs on nearly all countries, spokesperson Karoline Leavitt stated that his objective was to reduce inflationary pressures. She highlighted that deregulation, energy expansion, and tax cuts formed an economic strategy aimed at lowering living costs while maintaining effective trade policies. Despite this stance, some business leaders have expressed concerns about the impact of these tariffs. JPMorgan Chase CEO Jamie Dimon remarked in May that Trump’s tariff approach was overly aggressive. In an earlier letter to shareholders, Dimon indicated that resolving the uncertainty surrounding tariff policies would be beneficial for economic stability.
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White House economic council contracts idea tariffs speed up inflation
A White House economic council has determined that prices of imported goods have decreased this year, dropping faster than total goods prices since February.
The Council of Economic Advisers said in a for this month that, using an analysis of a price index used to track inflation, it has contradicted the idea that tariffs would speed up inflation.
“The Council of Economic Advisers (CEA), after decomposing the Personal Consumption Expenditure Price Index into imported and domestic components, found that the prices of imported goods have not only fallen this year, but also declined faster than overall goods prices since February,” the agency said. “These findings contradict claims that tariffs or tariff-fears would lead to an acceleration of inflation.”
Imported goods prices in the Personal Consumption Expenditure Price Index (PCE), which is watched by policymakers and financial markets, decreased by .1% from December through May, the council found. Meanwhile, the body noted, overall goods prices increased .4% during the same time period. The findings are reportedly consistent across core goods, which don’t include food or energy; durables, which last for at least three years; and nondurables.
CEA also found through an analysis of the Consumer Price Index (CPI), another inflation gauge, that imported goods prices have deflated .8% while total goods prices have remained constant. Finding a similar pattern in the CPI highlights the “robustness” of the results, the council explained, since there are a number of differences between PCE and CPI inflation.
The White House has consistently pushed back on the idea that tariffs President Donald Trump imposes on countries around the world would accelerate inflation. Spokesperson Karoline Leavitt said in April, when Trump announced tariffs on nearly every country, that Trump’s goal was to have less inflation.
“The president is focused every single day on lowering the cost of living in this country while simultaneously implementing these very effective tariffs. Massive deregulation, energy boom and tax cuts are the economic formula that will mean more prosperity and the lower cost of living,” Leavitt said.
Some businessmen have expressed concern over the tariffs. JPMorgan Chase CEO Jamie Dimon said in May that Trump’s approach was “too large, too big and too aggressive when it started.” A month earlier, Dimon wrote in a letter to shareholders that the quicker the matter of the president’s tariff policy is “resolved,” the better.
“In the short run, I see this as one large additional straw on the camel’s back,” the CEO said.
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