OffbeatTariff-driven price increases spreading through economy
Apple's November rout worsens after Trump says US could place 10% tariff on iPhones
Apple's November rout worsens after Trump says US could place 10% tariff on iPhones.
Tariff-driven price increases have spread more broadly through the U.S. economy, though on balance inflation has risen at a modest pace in most parts of the country, the Federal Reserve said Wednesday in its latest report on the economy.
The U.S. central bank's beige book, a snapshot of the economy gleaned from discussions with business contacts in the Fed's 12 districts in the weeks through November 26, also said that the economy appears to be growing modestly to moderately.
AP FACT CHECK: 'Tariff Man' Trump wrong on import taxes
President Donald Trump promised on Twitter that tariffs would maximize the country's economic heft and "MAKE AMERICA RICH AGAIN."Almost all economists say the president is wrong. That's because tariffs are taxes on imports. They can cause higher prices, reduce trade among countries and hurt overall economic growth as a result.The president's tweet on Tuesday followed an announcement that the U.S. would not increase a 10 percent tariff on $200 billion of Chinese goods in 2019. The two largest countries are in the middle of negotiating their terms of trade, after Trump said cheap imports from China were impoverishing the United States.
Labor markets tightened across a broad range of industries, and wage growth "tended to the higher side of a modest to moderate pace."
The dollar held on to slim gains after the report was released.
The Fed is widely expected to raise interest rates at the close of its Dec. 18-19 policy meeting. Policymakers have said the United States' strong economy could stoke higher inflation if they do not raise borrowing costs further.
At the same time, Fed Chairman Jerome Powell has signaled the Fed's three-year tightening cycle is drawing to a close and central bankers are looking for signs a global growth slowdown and a U.S.-China trade war might be weighing on the U.S. economy.
"Reports of tariff-induced cost increases have spread more broadly from manufacturers and contractors to retailers and restaurants," the Fed said in its report Wednesday.
President Donald Trump has slapped tariffs on hundreds of Chinese imports, prompting retaliation against U.S. exports.
The Fed said incomes and conditions in the agricultural sector, which has born the brunt of Chinese retaliatory tariffs, were "mixed," hit by tariffs and excessive rainfall.
It said that on balance, consumer spending held steady.
GM vs. Tariff Man.
"Tariff Man" is on a roll. Last week, President Trump demanded that General Motors back off from its recently announced plans to idle several U.S. plants and layoff thousands of workers. Given the market pressures confronting the auto industry, this is like commanding GM to stop the tides. Then, this week, by dubbing himself "Tariff Man" on Twitter, he effectively killed the one thing that could have actually helped GM: the trade détente he had called just a few days earlier with China. For a businessman, Trump doesn't seem to know much about business.
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