What’s this guy smoking? From the article (originally Wash Examiner):
Many so-called experts predicted that President Trump’s economic agenda would usher in an inflationary Armageddon. This projection was so often repeated in the media that many Americans, especially Democrats, believed a depression was imminent. Yet the economy is thoroughly beating expectations and consumers’ expectations are becoming increasingly optimistic.
…
Just to remind Dr. Antoni, several key indicators are moving down:
Figure 1: Nonfarm Payroll incl benchmark revision employment from CES (bold blue), civilian employment using smoothed population controls (orange), industrial production (red), personal income excluding current transfers in Ch.2017$ (bold light green), manufacturing and trade sales in Ch.2017$ (black), consumption in Ch.2017$ (light blue), and monthly GDP in Ch.2017$ (pink), GDP (blue bars), all log normalized to 2021M11=0. 2025Q1 GDP is third release. Source: BLS via FRED, Federal Reserve, BEA, S&P Global Market Insights (nee Macroeconomic Advisers, IHS Markit) (7/2/2025 release), and author’s calculations.
Dr. Antoni makes no mention of GDP (or GDO for that measure). Admittedly, GDP has experienced distortions due to the difficulties measuring the outcomes of tariff-frontrunning. However, “Core GDP” has slowed down as well.
Figure 2: Final sales to private domestic purchasers (black), 2023-2024 stochastic trend (light blue), SPF May survey median (tan), and Atlanta Fed nowcast of 7/17 (dark blue square), all in bn.Ch.2017$ SAAR. Source: BEA, Philadelphia Fed, Atlanta Fed, and author’s calculations.
Finally, Dr. Antoni makes reference to the improvement in expectations. Expectations have indeed improved, but overall sentiment still remains far below levels at the beginning of the Trump administration (shadowed light orange in Figure 3).
Figure 3: U.Michigan Economic Sentiment (blue), Conference Board Confidence Index (brown), SF News Sentiment index (green), all demeaned and divided by standard deviation 2021M01-2025m02. Source: UMichigan, Conference Board, SF Fed, and author’s calculations.
As for inflation, while it’s come down, expectations have risen since the Trump administration’s advent.
Figure 4: Univ of Michigan Survey of Consumers mean expected one year ahead CPI inflation (blue), Survey of Professional Forecasters (brown squares), WSJ survey (green inverted triangle), all in %. Source: U.Michigan, Philadelphia Fed, WSJ.
The Michigan survey indicates a jump with “Liberation Day” announcements. It’s come down since, but should the August 1st deadline come and see higher tariffs implemented, expectations might well resurge.
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