Commentary by Stephen Macaulay
On August 1, Donald Trump fired Erika McEntarfer, the Bureau of Labor Statistics (BLS) Commissioner.
Why?
Because the BLS came out with jobs data which show the employment numbers aren’t what the White House wants them to be.
Consequently they are, in Trump’s words, “faked” and “rigged.”
There is no supporting evidence presented, of course.
The BLS recalculated its numbers for May and June — something that is completely common — and determined there was a reduction of 258,000 in the number of jobs created — that’s COVID jobs category.
And the BLS determined that in July the economy only added 73,000 jobs.
Were that number to be readjusted, there would be a serious, serious issue.
But again, realize that the numbers adjustment isn’t something that has occurred only during during the Trump administration. Large data is hard.
Trump, of course, didn’t like the numbers, so he had the person delivering them fired.
This whole notion of firing people because he doesn’t like the economic numbers they provide is Trump’s M.O.
Over this past weekend Trump took to his social media site and wrote that Goldman Sachs CEO David Solomon “should go out and get himself a new economist.”
Why?
Because Goldman Sach’s economics team, led by Jan Hatzius, came out with a note saying through June US consumers have absorbed 22% of the cost of tariffs and that the bank anticipates it could go to 67%.
That, of course, flies in the face of the false claim that foreign countries and companies are paying the tariffs. US companies and US consumers are.
Takes Time
Now there seems to be some notion that the people who claimed the tariffs would have an immediate consequential effect on the economy are in the Chicken Little category.
We should be happy that there hasn’t been some sort of collapse.
But how is it that General Motors, a bastion of manufacturing, can announce it lost $1.1 billion in a single quarter due to tariffs and it doesn’t make people a little uneasy — to say nothing of the fact that the company anticipates it may lose $5 billion this year because of tariffs?
Is it plausible that a company that is losing money of that magnitude is going to (a) hire a whole bunch of people or (b) buy a whole bunch of automation because it can do the work without as many high-priced people.
(Let’s face it: the reason why GM makes vehicles in places like South Korea and Mexico is because it is more cost-effective for it to do so — and those cost savings are, in part, passed along to the consumers. The argument about a massive influx of manufacturing jobs as a consequence of the tariffs is simply flawed. Will there be reshoring? Yes. Will there be a sufficient number of jobs created to offset the costs that will be carried by consumers as a consequence of the tariffs? Not by a long shot.)
About Your Groceries
While a strong stock market is good for our 401Ks and we should all want that to continue, Wall Street is not the same — as we heard a lot during the presidential campaign from the likes of JD Vance, but not so much of late — as Main Street.
And we buy our goods on Main Street.
There seem to be some huzzahs! associated with this week’s Consumer Price Index numbers, including Trump’s claim that “tariffs have not caused inflation,” let’s look at the opening of the BLS release: “The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent on a seasonally adjusted basis in July, after rising 0.3 percent in June, the US Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 2.7 percent before seasonal adjustment.”
Seems to me that words like “increased” and “rising” are indicative that things are getting more expensive. Sure, those numbers are small now. But they are going in the wrong direction.
While Trump is not responsible for the full 12 months, he’s now been in office for more than half of that time, and just like he hasn’t ended the war in Ukraine, he hasn’t caused prices of groceries to go “way down.”
In February the price of food, according to the BLS, was up 0.2% over the price in February. In March it was up 0.4% over February. In April, there was an -0.1% decline, followed by an 0.3% increase in May, and another in June. Remember those are month-over-month increases, which means that it is compounded. Even small numbers matter when you’re at your local Kroger.
Overall, prices were up 2.7% in July 2025 compared to July 2024.
Again, while small numbers, it was proclaimed there would be movement in the opposite direction, and that is not happening.
Out of Your Pockets
In addition to which, not only does Goldman Sachs see an increase in costs for consumers, there is the Yale Budget Lab calculating the average consumer will have a hit of between $2,400 and $3,800 and Moody’s Analytics seeing a $2,400 premium paid by the average household.
Near as I can tell, NO US financial firms predict that consumers will pay lower prices as a result of tariffs.
While the administration boasts of the money that is coming into the Treasury as a result of tariffs, that money is not being paid by the foreign governments that are “ripping us off.” No, that is money that is being paid by companies that are purchasing foreign goods. The consensus is that those companies are, in many cases, absorbing those costs. This means they are taking a financial hit. Which will not make their investors very happy. So at some point, they are going to have to pass a larger percentage of those costs to consumers. Which gets us to that $2,400 that consumers are going to be paying overall per annum.
Going back to the GM example, many auto analysts predict that the average price of a new vehicle is going to increase $2,200 because of the tariffs.
Let’s assume that because of that price increase, fewer people are going to afford a new vehicle. So they hold on to their old one (which also becomes more expensive to maintain due to the 25% tariff on auto parts — and as most auto parts are made of things like steel, aluminum, and copper, there’s a 50% tariff on that, too). This means companies are going to need to be building fewer cars because there are fewer people buying.
So if you are running a factory and have less demand for the products you’re producing, do you keep all of your employees, or adjust the number to meet the demand?
And this applies to products across the board.
Trump can fire all of the people in government that he finds aren’t parroting his claims. He can post that executives at private companies should get fired.
But at the end of the day, the costs are going to be borne by all of us.
Maybe $2,400 isn’t much to Trump, Lutnick and Bessant, but it certainly matters to many Americans—even those who voted for Trump who thought what they pay at the supermarket would be less, not more.