Joe LaVorgna on Tariffs, Inflation, and Economic Growth

Inflation and Tariff Impact

• 💡 The latest inflation data shows core PCE in line with the prior month, with the previous month revised lower.
• 📈 Goods prices, where tariffs would be most visible, have shown minimal annualized increases (under 2%) since April, suggesting no significant tariff effect on inflation yet.
• ⚠️ Despite some predictions, the consumer has not yet significantly felt the inflationary impact of tariffs, with prices for autos, clothing, and pharmaceuticals showing virtually no inflation since April.

Economic Growth and Consumer Spending

• 🚀 Consumer spending numbers are described as "Trumpian," indicating huge increases and contributing to strong GDP growth projections (around 3.9% by the Atlanta Fed).
• 📊 This growth is occurring in an environment of decreasing inflation and is expected to be further boosted by the benefits of the tax bill, particularly for middle and lower-income consumers in 2026.

Wage Growth and Tax Bill Provisions

• 💰 Real blue-collar wages are showing growth exceeding 1%, the fastest pace for any president in history, fueling faster consumer spending.
• 💸 Workers are taking home more after-tax pay as the cost of living slows.
• 🧾 A provision in the tax bill allows for the early receipt of voluntary tips in the new year, with guidelines issued by the Treasury.
• 💻 The legislation also includes provisions for digital asset earners like YouTubers and podcasters, designed for the 21st-century economy.