Let's Track the Economy (with objective empirical data?)

[ThatRobGuy]

You seem to want to rely on subjective sentiments. They will always vary drastically with place and social class. That is why aggregate metrics are needed, to get the bird's objective eye view of the economy.


"What kind of buying power do I have in terms of housing?" Local and national housing markets. https://www.cnn.com/2025/01/06/economy/donald-trumps-housing-market-conundrum/index.html


"What does my grocery bill look like?" Food Price Outlook - Summary Findings | Economic Research Service


"How much does it cost to fill up my tank?" AAA Fuel Prices

But those aren't subjective sentiments.

They maybe selective sentiments...(in that they only apply to a portion of the population)

But they're valuable none the less.


What percentage of the population has to be dissatisfied and feeling a "pinch" before the assessment morphs from

"This is just a select few people griping, they've been duped into thinking it's bad when it's not, or they're just nitpicking about something insignificant to bash the party they don't like"
to
"Okay, maybe these gripes are valid and worth looking into"


From the CNN article you posted:
The standard 30-year fixed mortgage rate, the most popular home loan option, was just below 2.8% when Trump left office in January 2021 during the pandemic. Last week, it was 6.91%. That means people who borrow money to buy a home must now pay hundreds, or even thousands, more per month than if they had bought a home for the same price four years ago.

Home prices have also risen significantly since then. From January 2021 through October 2024, the latest data available, national home prices have jumped 37%, according to the S&P CoreLogic Case-Shiller Home Price Index.


Those aren't insignificant numbers, and those kinds of numbers aren't offset by having better numbers on the Dow, or the country lowering its unemployment rate or improving GDP-to-Debt ratios.


Right now we're in a spot where, for a person maybe making $50-70k with a 700 credit score, they're not going to be able to afford a decent sized house at a price point that someone would have back in 2018-2020.

For people who bought their homes prior to that and got in on a fixed rate, I'm sure they are seeing economic improvements right now (or whatever strains exist, are negligible). But not everyone is in that situation.

Two people can have the same income, same credit score, saved up the same down payment, etc... the person who bought their house in 2018 may have a $1100 mortgage payment. The other person would be lucky to get the exact same house for $1700.



The "The economy is great, you're just too naive and uninformed to realize how good you've got it!" isn't an effective sales pitch when the GOP does it to tout "The triumph of trickle-down", and it's not an effective pitch now when the other team is trying to tout the "Triumph of Bidenomics".

To be clear, that's not a suggestion that Trump's economic plan with magically fix anything either. There's a reason why power shifts back and forth pretty regularly between the two parties. It's because there are grievances, and when they don't get fixed, the other party pounces and runs on the premise that they'll be the ones able to fix the thing that people are upset about, and when they don't, things switch back.

 

[o_mlly]

How long until German manufacturers retool in Canada?

Well, the German auto manufacturers would first have to build a plant in Canada before "retooling" it.

Even more importantly, why would a German auto maker invest in production facilities in Canada and risk the impending tariff? The market being served is in the USA, not in Canada.

About the same amount of time it takes Ford to start producing Mustangs in Cologne.

? See above.

 

[essentialsaltes]

? See above.

Ford has vehicle production facilities in Cologne Germany and Valencia Spain.

 

[o_mlly]

Ford has vehicle production facilities in Cologne Germany and Valencia Spain.

It's called the European Union ... free trade ... no tariffs. Ford would still need an economic reason to build Mustangs (instead of EV trucks) in Europe. Do you have one?

 

[essentialsaltes]

It's called the European Union ... free trade ... no tariffs. Ford would still need an economic reason to build Mustangs (instead of EV trucks) in Europe. Do you have one?

If Trump makes good on his promise to impose tariffs on everyone, everyone will respond in kind and impose tariffs on the US. Ford would do this to avoid the European tariffs on US goods.

 

[Gregory Thompson]

Which US Party fits this best?

two parties, double speak.

 

[o_mlly]

If Trump makes good on his promise to impose tariffs on everyone, everyone will respond in kind and impose tariffs on the US. Ford would do this to avoid the European tariffs on US goods.

? Do you know how may USA produced Fords are currently exported to Germany? I guess not many. If so, then a German tariff on Ford would be economically of little concern to the USA.

It's all about the jobs and always has been. How many jobs would the tariff create vs. how many jobs would be lost.

 

[Laodicean60]

Even more importantly, why would a German auto maker invest in production facilities in Canada and risk the impending tariff? The market being served is in the USA, not in Canada.

Germany have auto manufacturers in Canada. They could sell autos to countries not in a trade war with the US.
Edited: I'm wrong about German manufacturer it was Toyota.

 

[essentialsaltes]

? Do you know how may USA produced Fords are currently exported to Germany? I guess not many.

As you noted, Germany is part of the EU. So it would be all of the EU retaliating. And as you also noted, the German-produced cars could go to other European countries with no fear of a tariff.

More to Laodicean's point about Canada, Ford does export ~200,000 US-made cars to Canada. And it has three manufacturing sites in Canada, including the plant where the Mustang 5.0 engine is made. Ford would have to pay a US tariff to bring the engine into the US, and then pay a Canadian tariff to send a completed Mustang to Canada. Much easier to avoid both of those by making the whole thing in Canada.

How many jobs would the tariff create vs. how many jobs would be lost.

Adding tariffs adds friction to the global economy. Everyone loses. Economists suggest the Trump tariff plan would cost 1% in US GDP. That will be a lot of jobs lost.

 

[o_mlly]

If Trump makes good on his promise to impose tariffs on everyone, everyone will respond in kind and impose tariffs on the US. Ford would do this to avoid the European tariffs on US goods.

? First, Trump threatens tariffs only on countries with which we have a negative trade balance ... due to unfair trade practices on their part.

So, not "everyone" -- all are trading partners -- would impose tariffs on USA made goods. What exactly would Ford do? They don't impose tariffs.

 

[o_mlly]

As you noted, Germany is part of the EU. So it would be all of the EU retaliating.

Nope. Depends on the goods that become subject to US tariffs.

And as you also noted, the German-produced cars could go to other European countries with no fear of a tariff.

No problem. Not one USA job at risk.

Ford would have to pay a US tariff to bring the engine into the US, and then pay a Canadian tariff to send a completed Mustang to Canada.

Nope. Depends on the goods that become subject to US tariffs. The tariffs would be targeted ... to keep and increase jobs in the USA.

Much easier to avoid both of those by making the whole thing in Canada.

Easier to serve the Canadian car market only. Remember, the USA is the important market, not Canada.

Adding tariffs adds friction to the global economy. Everyone loses. Economists suggest the Trump tariff plan would cost 1% in US GDP. That will be a lot of jobs lost.

Friction can be good for the USA if that friction opens foreign markets now culturally or structurally closed to USA goods.

Not everybody loses ... only those countries that net-net lose jobs.

Economists suggest a lot of things ... "on the other hand ..." has always been one of my favorite prefaces to an alternate prediction.

 

[essentialsaltes]

? First, Trump threatens tariffs only on countries with which we have a negative trade balance ... due to unfair trade practices on their part.

On the campaign trail, Trump has been talking about universal tariffs. Against all countries on all products.​

This time, he’s gone much further: He has proposed a 60% tariff on goods from China — and a tariff of up to 20% on everything else the United States imports.

Since the election, he has not backed off from the idea.

Trump Says He Won’t Narrow Universal Tariff Plans​

“‘The story in the Washington Post, quoting so-called anonymous sources, which don’t exist, incorrectly states that my tariff policy will be pared back. That is wrong,’ Trump said in a Truth Social post on Monday,

 

[essentialsaltes]

Easier to serve the Canadian car market only. Remember, the USA is the important market, not Canada.

Now keep in mind that you were interested in American jobs, not the American market.

If the production of 200,000 cars moves from the US to Canada, that would affect US jobs.

 

[Akita Suggagaki]

"Okay, maybe these gripes are valid and worth looking into"

How do we get from "maybe" valid to confirmed valid if not with economic indicators?

 

[ThatRobGuy]

How do we get from "maybe" valid to confirmed valid if not with economic indicators?

You can use economic indicators.

However, when there's a wide enough chasm between the "macro" and the "micro" for >40% of the population, any politician or government official would be wise to start giving some credence and consideration to some of those anecdotes.


Obviously, this is a very simplistic example:

If the government implements a policy aimed at wage growth and reducing unemployment, that would be a macroeconomic decision.

If the end result of that policy is that
It reduced unemployment by 200,000
and 6 months after that...
Wages across the board increased by 5%

On paper, that sounds like a great policy.

However, if that policy means 100,000 jobs paying $75k/year ended up getting eliminated, and 300,000 jobs only paying $30k/year got added, (and people from the former had to end up taking those jobs from the latter out of desperation)

That's a very different experience for 100,000

Pretend "Mike Davis" was a one of the guys who was at a $75k/year job. His job got eliminated, and he had to take one of those $30k/year jobs. 6 months later, he got that 5% increase bumping him up to $31,500.

Mike Davis's experience is very different from the "glowing" macroeconomic statistics the government officials at the top are seeing on paper doesn't line up with experiencing the microeconomic downstream effects.




For such a large number of people with economic grievances, they can't all be imagining it or overreacting.

Sure, there's a few like that:
For example, those guys who drive $70,000 full size pickup trucks, and then act like the sky is falling because their weekly fill-up costs an extra $18 (and they react by buying a $20 pack of Biden "I did that stickers" to vandalize gas stations with)...sure, those guys are just blowing hot air.

But I don't think that's the case for the 40% of the population who are dissatisfied with the current economy and are saying "I don't care what it says on paper at a high level, I'm not merely imagining that things are tougher for me this year compared to 5 years ago, I'm looking at my bank statements and the numbers don't lie"

 

[o_mlly]

On the campaign trail, Trump has been talking about universal tariffs. Against all countries on all products.​

This time, he’s gone much further: He has proposed a 60% tariff on goods from China — and a tariff of up to 20% on everything else the United States imports.

Since the election, he has not backed off from the idea.

Trump Says He Won’t Narrow Universal Tariff Plans​

“‘The story in the Washington Post, quoting so-called anonymous sources, which don’t exist, incorrectly states that my tariff policy will be pared back. That is wrong,’ Trump said in a Truth Social post on Monday,

PBS and anonymous sources? Not reliable.

Negotiating tactics.

Now keep in mind that you were interested in American jobs, not the American market.

That's correct.

If the production of 200,000 cars moves from the US to Canada, that would affect US jobs.

? What would Trump do that could cause the production of 200,000 cars move from the US to Canada?

 

[KCfromNC]

For such a large number of people with economic grievances, they can't all be imagining it or overreacting.

If the feelings are based on reality, there will be aggregate data which would show what they're complaining about. Which data points are you proposing to track?

 

[ThatRobGuy]

If the feelings are based on reality, there will be aggregate data which would show what they're complaining about. Which data points are you proposing to track?

I noted earlier that housing CPI indicators are probably a good start.

In terms of renters, the average rent cost has gone up roughly 24% from 2020 through 2024.

In terms of trying to buy a home, median home prices increased by about 28% during that same time window.

A person who was renting in 2020 for $1300/month, could be stuck paying upwards of $1700/month now. (perhaps even more depending on location)

Even if that person got a raise all 4 years, and despite inflation cooling, there's a good chance they still feel like they've moved backwards compared to where they were when the look and see how much is left in their checking account at the end of the month.


Just in terms of the median home prices right now... they're just north of $400,000.

According to sources like RocketMortgage, Redfin, and Huntington Bank:
To afford a $400,000 home, assuming a 20% down payment and a 6.5% interest rate on a 30-year mortgage, you would need a gross monthly income of approximately $7,786.55. This assumes you only have $1,000 in existing monthly debt.

In a nutshell, unless you're earning six figures with a decent credit score and less than $1,000/month in existing debts, this housing market isn't great for you at the moment. (unless you're willing to "settle" and live in a house that's not what you were hoping for, or that's in a location you're maybe not crazy about)


Corresponding stats:
Only 8% of the US population earns six figures, and only 15% of households make six figures.

(Safe to assume those percentages drop even further when you filter it down to just the ones who have $80k laying around for a down payment)

60% of the US live in homes that are owned (but a substantial portion of which were homes that were purchased before 2020)


So, I think one can make the inference that arguably leaves 40%+ of the population that's stuck in a "not so great" housing situation now, despite many of them maybe having an income that would've sounded pretty decent on paper 5 years ago.


I would imagine there's probably quite a few 30-somethings feeling frustrated thinking "I make $70,000/year, I did everything right, why are my choices limited to moving backwards in terms of expendable income every year in a rental, or taking on a mortgage that would leave me 'house poor' for the foreseeable future?"

 

[essentialsaltes]

? What would Trump do that could cause the production of 200,000 cars move from the US to Canada?

Ford does export ~200,000 US-made cars to Canada. And it has three manufacturing sites in Canada, including the plant where the Mustang 5.0 engine is made. Ford would have to pay a US tariff to bring the engine into the US, and then pay a Canadian tariff to send a completed Mustang to Canada. Much easier to avoid both of those by making the whole thing in Canada.

 

[o_mlly]

More to Laodicean's point about Canada, Ford does export ~200,000 US-made cars to Canada. And it has three manufacturing sites in Canada, including the plant where the Mustang 5.0 engine is made. Ford would have to pay a US tariff to bring the engine into the US, and then pay a Canadian tariff to send a completed Mustang to Canada. Much easier to avoid both of those by making the whole thing in Canada.

Not likely.

What is the product mix of the 200M vehicles exported to Canada? What is the present capacity utilization of the Ford plants in Canada? Are those plants physically (with reasonable investment) capable of producing the 200M imported vehicles, eg., the trucks vs. cars, EVs vs gas models?

The point is net jobs lost vs gained. Do the math. Canada exports 1.2 million vehicles per year to the USA.