Jobs are the New Target

November 2024 Economic Update

The Fed has a grasp on inflation. We will see how long that holds up. We must wait for Trump to get into office as some have said that his policies will be inflationary.

• I am of the inclination that his tax cuts and energy expansion will offset the tariffs.

• Our current average tariffs on imports are about 2%.

• His last administration averages got to about 3%.

• A 1% price increase is not inflationary in and of itself, it is just a price increase.

If he keeps raising the tariffs year after year, then yes, it is inflationary, but I don't see that as a high probability. Trump will mostly likely use the tariffs as a bargaining chip.

The Fed’s Focus Now…

Jobs Jobs Jobs. Labor supply growth is likely to contract over the next 6 to 12 months as we have no real reason to believe that the Job Vacancy Rate is to reverse course. People are settling in, and employers are retaining their employees.