A few quick and dirty #CPSMicrodataDay charts, as I ponder other ones.
According to the household survey, broad labor market disruption fell by 8 million people in May, but there are still 32 million people who have left jobs or had their hours involuntarily cut since February. /1
We need to be very cautious about CPS data right now, but one interesting result: median same-worker wage growth hasn't slowed significantly yet, either on an hourly or weekly basis.
That's not what we would expect in such a sharp downturn, though perhaps this takes time. /2
That said, non-raise rates are rising, though note this series is noisy and the 12-month moving average I use will necessarily only change slowly. /3
But--and this is why we need to be more cautious these days--response rates are plunging, widening the uncertainty bands around the data. /4
Moreover, in-person interviews are plunging too (for utterly defensible reasons!), but in-person interviews consistently yield higher unemployment rates for some reason, so this shift may be having a compositional effect on the CPS, though I'm sure BLS has tried to adjust. /FIN
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New @The_Budget_Lab tariff analysis incorporating all tariffs through Sept 3. This is a major update. We:
• incorporate higher assumptions about Canada & Mexico tariff-free import shares;
• show 2 scenarios: all tariffs & no IEEPA tariffs after Jun 2026.
In brief...
1/12
@The_Budget_Lab Under our all-tariff baseline, consumers face an effective tariff rate of 17.4%, a 15.0pp increase from 2024 & the highest since 1935. After shifts in spending in reaction to the tariffs, the effective tariff rate will be 16.4%, a 13.9pp increase & the highest since 1936
2/12
@The_Budget_Lab The price level from all 2025 tariffs rises by 1.7% in the short-run under our all-tariff baseline, an average per-household income loss of $2,300 in 2025$. The post-substitution price increase settles at 1.4%, a $1,900 loss per household.
3/12
We have a new @The_Budget_Lab report out today looking at the short-run effects of tariffs so far. Basically, we asked the questions, "What do we see in actual data to date, and how does it compare to our priors." In brief...
1/13
@The_Budget_Lab REVENUE & TARIFF RATES. New 2025 tariffs have raised ~$88B thru Aug, with $23B in Aug alone. The actual effective tariff rate was ~11.5% in Aug vs 18.2% statutory. The wedge b/t the actual & statutory rates is due to factors that lag revenues & low tariff shares from Canada.
2/13
@The_Budget_Lab GOODS PRICES. Goods prices are higher than they would be absent tariffs. Durable goods prices (furniture, appliances, electronics, etc.) & all core goods prices (durables plus apparel & other nondurable goods) were 2.3% & 1.9% above their pre-2025 price levels in Jun & Jul.
3/13
Headline CPI 0.29% MM/2.70% YY, core CPI 0.32% MM/3.06% YY. Small upside surprise on monthly headline inflation, rest in line with expectations.
Grocery & energy prices declined MM, core goods inflation stayed at a warm 0.2%, & core services inflation picked up to 0.4%.
In June, excess monthly core inflation was largely a goods story, in large part driven by tariff price adjustments.
In July, the excess is a bit larger on net but more split between goods & services.
On the core goods side, several tariff-sensitive items are still above pre-2025 trend price levels. The most significant are furniture, windows/floor coverings, & household equipment. Appliances & electronics also above trend. Girl's apparel slightly below trend.
New @The_Budget_Lab tariff analysis incorporating the Administration's new list of "reciprocal" tariffs published last night and going into effect August 7, as well as maintaining the 25% rate on Mexico. In brief...
1/10
@The_Budget_Lab Consumers face an overall average effective tariff rate of 18.3%, a 15.9pp increase from 2024 & the highest since 1934. After consumers & businesses shift spending in reaction to the tariffs, the average tariff rate will be 17.3%, a 14.9pp increase & the highest since 1935
2/10
@The_Budget_Lab The price level from all 2025 tariffs rises by 1.8% in the short-run, an average per household income loss of $2,400 in 2025$, assuming no Fed reaction & full consumer passthrough. The post-substitution price increase settles at 1.5%, a $2,000 loss per household.
3/10
New @The_Budget_Lab tariff analysis incorporating 1) the 50% copper tariff, and 2) the July 7 & 9 letters to 22 countries with new "reciprocal" tariff rates. Both go into effect August 1. In brief...
1/10
• Consumers face an overall average effective tariff rate of 18.0%, a 15.6pp increase from 2024 & the highest since 1934. After consumers & businesses shift spending in reaction to the tariffs, the average tariff rate will be 16.9%, a 14.5pp increase & the highest since 1935
2/10
@The_Budget_Lab • The price level from all 2025 tariffs rises by 1.8% in the short-run, the equivalent of an average per household income loss of $2,400 in 2025$, assuming no Federal Reserve reaction. The post-substitution price increase settles at 1.5%, a $2,000 loss per household.
3/10
New @The_Budget_Lab tariff analysis incorporating 1) the US-Vietnam framework announced July 2, and 2) the July 7 letters to 14 countries with new "reciprocal" tariff rates, which go into effect August 1.
In brief...
1/10
• Consumers face an overall average effective tariff rate of 17.6%, a 15.2pp increase from 2024 & the highest since 1934. After consumers & businesses shift spending in reaction to the tariffs, the average tariff rate will be 16.5%, a 14.1pp increase & the highest since 1936
2/10
@The_Budget_Lab • The price level from all 2025 tariffs rises by 1.7% in the short-run, the equivalent of an average per household income loss of $2,300 in 2025$, assuming no Federal Reserve reaction. The post-substitution price increase settles at 1.5%, a $1,900 loss per household.
3/10