Figures are a sign that Trump policies could start to escape the global trade deficit, which the president considers a key problem for the American economy. And the prices did not yet push higher prices for consumers in April, in a boon in Trump.
“I would say that this is exactly what the administration has converted, and it is so far what is happening,” said Joe Lavorgna, chief economist of SMBC Nikko Securities and former economic adviser from Trump, on CNBC.
Although the drop in spending may be an indication that the economy slows down, taken together, the data “ultimately is not a warning sign for the moment, especially because wage growth was solid,” said Kevin Gordon, a main investment strategist at Charles Schwab. “For the moment, it is a voluntary constraint of the budget on the part of the consumer.”
It is too early to know where the trade deficit will be resolved in the long term. In May, the administration defused tensions with China, and there could be a certain resumption of trade between the two countries.
Long -term price rates are also uncertain. The administration negotiated agreements which were already mired Even before a decision of the Federal Court called into question the legality of the majority of Trump’s prices. Now, discussions with China are blocked, Trump arguing in an article on social networks that Beijing had “completely violated” a negotiated agreement in Geneva. And this is an open question if the president would negotiate a rate rate lower than the 10% floor he has placed in countries around the world.
In the meantime, economists expect certain pricing costs to begin to appear in official inflation data in the coming months. For the moment, the first effects have mainly appeared in the confidence reports of dark companies and the reduction of beneficiary margins for producers.
