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Tariffs Taking Jobs, Hurting Economic Outlook
A report found that increased tariffs on Mexico could end up costing 400,000 Americans their jobs. The report from The Perryman Group suggests that Texas would be the hardest hit, standing to lose more than 117,000 jobs. Texas is Mexico’s largest export market.
For the first quarter of 2019, U.S. exports to Mexico totaled $64 billion while imports were $86.6 billion. The Mexican and U.S. economies are integrated, with cross-border supply chains being very common.
According to the report, for every year a 5% tariff was in place, the net losses for the U.S. economy would be an estimated $41.5 billion in gross domestic product and $24.6 billion in income.
American automaker Ford said tariffs on Mexico would have a “significant” negative impact of the company.
Auto Loans Being Driven Up
Experian reports that Americans are borrowing more and paying more per month for their auto loans. The average amount borrowed to buy a new car hit a record $32,187 in 1Q of 2019. Loans used to purchase used cars also hit a record hit at $20,137.
As a result, the average monthly loan payment for a new car climbed to a new high of $554 and to a record $391 for used vehicles.
Despite strong new car sales and loans going strong, Americans with good credit are increasingly purchasing used models instead of new.
NY Fed Calls On Central Bank To Act On Inflation
New York Federal Reserve President John C. Williams said this week that low inflation is a “pressing problem” in developed economies.
Williams is so concerned about combatting inflation that he’s asked the central bank to change its strategy on the matter. Williams said that while he’s always been vigilant about inflation being too high, he believes inflation being too low is a “more pressing problem.”
Analysists and experts have been trying to predict the Fed’s next move with very little success. The consensus seems to be that if the markets continue performing at their current level, a rate could be coming later in the year.
Anticipating this, Williams said that low inflation will give the banks very little room to maneuver if and when an economic slowdown happens.
AdvisorNews Managing Editor Cassie Miller may be reached at cassie.miller@Adnewsfeedback.com. Cassie has an extensive background in magazine writing, editing and design. Follow her on Twitter @ANCassieM.