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Advisor

consumer spending

and government spending are the bright spots of the economy- manufacturing,the trade deficit, business investment are not good.

But would it not be true that if tariffs increased the price of goods 1% and  consumers bought the same basket of goods, then consumer spending would be up 1%?

That 1% goes in the government's pocket. 

But it would, I think, count toward GDP. When in reality it is just a reverse entry on some of the stimulative government deficit spending.

 

1 Reply
Honored Advisor

Re: consumer spending

The Big Box stores have been on a trajectory downward long before autumn of 2016 Shopko, K-Mart Sears, JC Penny, Herbergers/Yonkers, Von Maur, BonTon ect ect   The Kohls stores left the parking lot is sparse, all old people wandering around only buying if they get 70% of off 90% and use "Kohl`s cash" and it`s the 3rd of the month and their social security check came.

Those under 30`s that spend the money are more "minimalists" they`s rather take Uber than own a car, apartment rather than own a house.   A lot of that spending 20 years ago was crap fixing up their house, now if you rent you don`t have the space for a lot of crap.  Nowadays you put all your money into a I-Phone and video games and Alexa  and second hand clothes and that`s about all you need,    Shopping malls and China junk, aside from the copied US electronics demand has been going down without Trump.