A leading economist warns that U.S. consumers may rush to purchase big-ticket items in the fourth quarter, anticipating President-elect Donald Trump‘s proposed 20% tariff on imports.
What Happened: “I wonder whether we are going to see a burst of spending on consumer durables in Q4, as people pull forward spending on big ticket items ahead of the tariffs. I’m already hearing anecdata of this,” economist Justin Wolfers wrote on X following Trump’s victory in the 2024 presidential election.
Wolfers’ observation comes as Trump secured a decisive win over Democrat Kamala Harris, capturing 277 electoral votes and 51% of the popular vote, according to Associated Press figures. The president-elect has promised to implement broad tariffs, including a 10% levy on all imports and higher rates on Chinese goods.
Why It Matters: Trump’s victory, marking the first non-consecutive second term since Grover Cleveland in the 1800s, sets the stage for significant economic policy shifts. Beyond tariffs, his agenda includes extending the 2017 tax cuts and exempting Social Security payments, tips, and overtime income from taxation.
The potential consumer response highlights the broader economic implications of Trump’s trade agenda. ABN Amro senior economist Rogier Quaedvlieg cautioned that “a full-scale implementation of Trump’s tariffs will increase inflation and put the U.S. in a recession.”
JPMorgan analysts estimate the proposed trade policies could push inflation up by 2.4% in a worst-case scenario, potentially triggering a surge in consumer spending before the tariffs take effect.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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