Prices Fell in December, Tariffs Are Not Pushing U.S. Prices Higher

Breitbart | 1/15/2019 | Staff
shankay (Posted by) Level 3
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Prices fell in December, indicating U.S. businesses are not passing on the costs of tariffs to consumers.

The Labor Department said Wednesday that its Producer Price Index fell in December. Compared with the month, prices were down 0.2 percent. Economists had forecast a slight price gain for the month.

Reason - Inflation - Data - Drop - Price

One reason for the very tame inflation data is the steep drop in the price of oil. Absent the volatile food and energy categories, prices of goods fell just 0.1 percent.

Inflationary pressures have been easing. Producer prices advanced 0.1 percent in November and 0.6 percent in October.

Basis - Prices - Percent - December - Move

On an unadjusted basis, prices were up 2.5 percent compared with December 2017. That is a move down from the year-over-year price gain of 2.7 percent recorded in November and it matches what was recorded in December of last year. In other words, the December price gains were no higher than what was recorded before the Trump administration’s tariffs on steel, aluminum, and China imports were imposed.

Price levels have held remarkably steady on most categories of goods in 2018, defying predictions that American households would be squeezed by tariffs on steel, aluminum, and around $250 billion of goods made in China. On Monday, China’s commerce ministry announced that it ran a trade surplus with the U.S. last year that was the highest on record. The U.S. collected around $8 billion in tariffs in the October through December period, around 83 percent more than the period a year prior.

Price - Increases - Production - Chain - Materials

Price increases are more noticeable lower down in the production chain of materials and components that go into making final goods, although recent data show that rise has moderated or reversed. Steel mill products, for example, fell 0.4 percent for the month but were up 14.4 compared with a year ago. That’s a reversal of the gains seen immediately after...
(Excerpt) Read more at: Breitbart
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