economist stephen moore says slowing inflation and rising incomes signal improving u.s. outlook despite consumer frustration
moore highlights lower gas prices, upcoming tax cuts, and stabilizing price pressures, while warning that china’s record $1 trillion trade surplus will be a major issue in trump’s april meeting with xi jinping.
economist stephen moore joined the discussion to explain why consumer prices have not fallen, even though the current administration has rolled back many of biden’s regulations. according to moore, the goal is not to push prices down dramatically but to stabilize them, because rapid disinflation can be as harmful as inflation for the broader economy.
moore noted that recent data shows inflation running at roughly 2.5%, which he described as a significant improvement compared with the biden years, when the average inflation rate over four years was about twice as high. he stressed that this shift marks an important turning point in price dynamics across the economy.
a key point moore emphasized is that, for the first time in several years, people’s incomes are now rising faster than the inflation rate. this represents a reversal of the prior period, when inflation consistently outpaced wage growth and eroded purchasing power. despite this improvement, he acknowledged that many americans still feel financially pressured.
moore referenced a psychologist’s view that consumers tend to focus heavily on items that are going up in price, while largely ignoring categories that are becoming cheaper. as an example, he highlighted that gas prices are at their lowest level in about five years, a factor that historically served as a leading indicator of easing inflation but is not being fully recognized in public sentiment.
looking ahead, moore expressed optimism about the financial outlook for middle-class families in the coming year. starting in january, he explained, the average family will see less money withheld from their paycheck as a result of the new tax bill, which he argued will provide tangible relief and support disposable income growth.
the conversation then turned to global trade and china’s surging surplus. moore pointed out that china’s trade surplus has now climbed above $1 trillion for the first time, underscoring the scale of its export strength and the depth of the u.s.–china trade imbalance.
moore stated that trump has been negotiating with chinese officials for nearly a year to push china to purchase more american products and to stop discriminatory treatment of u.s. goods, including dairy, farm, and manufacturing products. he argued that china’s restrictive practices have long disadvantaged american producers in key sectors.
at the same time, moore identified himself as a free trader and acknowledged that low-priced goods from china do improve affordability for american consumers, especially at a time when many households are still sensitive to prices. he noted that the availability of cheaper imported products can help stretch family budgets, even as the overall trade deficit remains a concern.
moore expects that the massive trade deficit and china’s trillion-dollar surplus will be major topics during trump’s planned april meeting with chinese president xi jinping in beijing. he suggested that trade, market access, and the competitive position of u.s. industries will likely be central issues in those discussions.
overall, moore’s outlook combines cautious optimism on inflation and middle-class finances with a clear warning about the strategic and economic implications of the u.s.–china trade gap.
video source
watch the full interview here:
https://youtu.be/wLxzl5dEtZQ
