Durable Goods Inflation (where Tariffs Hit) Turns Negative Month to Month \ stacker news ~econ

I wanted to take a look at this article from Wolf Street with you guys.

https://wolfstreet.com/2025/08/29/core-services-pce-inflation-spikes-not-tariffed-durable-goods-inflation-where-tariffs-hit-turns-negative-month-to-month/

The core services PCE Price Index, which excludes energy services, accelerated to +0.36% (+4.4% annualized) in July from June, the third month in a row of acceleration. The increase was driven by non-housing services; rents continued to decelerate.

This caused the 3-month core services PCE price index to accelerate to 3.1% annualized; and it caused the 6-month index to accelerate to 3.3%. Services are not tariffed.

But the durable goods PCE price index fell by 0.11% (-1.3% annualized in July from June). Many durable goods are imported, or their components are imported, and many of them are tariffed.

The article further goes on to explain the (supposed) reasoning behind this, but the theory is that because of the massive price increases during Covid era inflation, businesses are already overcharging us on durable goods by a significant enough margin that they can actually afford to eat the cost of tariffs. Apparently American's have already gotten sticker shock on on the increase of prices and therefore have already slowed down purchasing. Businesses can't continue increasing the prices on us without losing sales.

I'm not sure if we will see a spike in the future on durable goods due to tariffs in the future, but currently it doesn't appear that it's the case.

142 sats \ 0 replies \ @Undisciplined 6 Sep

I certainly don't have a handle on everything that's been changing, but the idea I've been leaning on heavily is regime uncertainty.

When policies that affect businesses are in rapid flux, those businesses pause long-term economic activities. The reason is that, depending which way the policies stabilize, long-term projects may become sources of loss and businesses don't want to lock that in.

One way that would manifest is not buying a bunch of durable goods that you may not need under plausible sets of future policies.