Hi and welcome to our new weekly news roundup! I’ve been wanting to have some sort of link roundup/economic news update ever since I launched The Purse, and now that Alicia Adamczyk is joining as senior editor, I have someone to help me pull it off each week! Alicia and I will be trading back and forth on writing the intro essay, and we’ll both be contributing to the links roundup. This is an evolving project, so you might see it change a lot over the next few months. We welcome constructive feedback!
I’ve been reluctant to write about tariffs for a few reasons. One, it feels like the news around them is always changing. (Just last week, a court ruled they are illegal. Now the issue might be fast-tracked to the Supreme Court.) Two, they are so complicated! Plus, there are many beat journalists doing a great job covering this topic.
I also haven’t had firsthand experience with tariffs impacting my own spending—until last week. My son is a big fan of Star Wars Legos, specifically the mini figs1, and in mid-August, my mom bought him a “battle” pack at Walmart for $30. Fast-forward just one week, and I was shopping with my family at an outdoor mall on Cape Cod. We walked into a cute family-owned toy store in the shopping center, and they were selling a new package of Star Wars Legos we hadn’t seen before. This box—which had a similar number of Lego pieces to the box we just purchased at Walmart—was selling for $60!
“We had to increase the price of our Legos to keep up with tariffs,” the clerk explained. I was curious if the price was as high at Walmart, and while the big-box retailer isn’t charging $60, the same Star Wars “battle” pack is $44.97.
Seeing the price rise on Legos by 50% to 100% makes my eyes water. And frankly, it puts these toys just outside my budget. Legos were already a pricier toy (compared to, say, Hot Wheels, Freddy’s first love). Still, I might be inclined to buy a $30 toy on a whim. But $45—not so much. And $60? You can forget it. Which makes me feel really bad for the cute family-run toy store. (Not so bad for Freddy; he has plenty of mini figs IMO!)
When I was working on the Bank of Mom and Dad, the Yahoo/YouGov survey we ran found that 54% of parents were worried about how tariffs were going to impact back-to-school shopping prices. But the families I interviewed didn’t mention tariffs being an issue when it actually came time to shop. I imagine that’s because many retailers are still selling backstock and perhaps keeping prices low, since back-to-school season is the second-biggest shopping event of the year.
In mid-July, CNN reported that there are many reasons why it might be a while before we see prices rise because of tariffs. Still, Goldman Sachs economists wrote in a recent report that they believe it’s American consumers who will eventually bear the burden of related price hikes. (The Trump administration didn’t like this assessment and told Goldman to fire its chief economist.)
No surprise: All this uncertainty is making people feel uneasy. The Wall Street Journal reported last week that consumer sentiment dropped 6% in August, with the middle class “playing an outsize role in that waning optimism.”
“Several CEOs across the dining, retail, fashion, and airline industries have said their middle-class customers are increasingly strapped, even as high earners keep on buying,” the article read.
This doesn’t surprise me at all. Many families featured in Home Economics budget down to the last dollar. They don’t have wiggle room for more price hikes. And while many personal finance experts recommend finding ways to earn more rather than looking for areas where you can cut your spending, that’s more challenging, as the job market looks bad. The buzzy new corporate phrase making the rounds is “job-hugging”—the idea that workers are holding on tight to their current jobs even if they aren’t happy. Does this mean the heyday of job-hopping is over?
All of it just has me feeling a sort of low-key sense of dread. We know things are likely to get bad, but when? It feels impossible to plan when everything is up in the air. I’ll add that Kathryn Anne Edwards’ piece on the confusing state of the U.S. economy is very informative for anyone looking for an even deeper dive.
How are you feeling about tariffs and the economy in general? Do you have a number in mind that’s your breaking point for nonessential purchases?
-Lindsey
Tariffs in the news
Want just the basics? NPR reporters have the answers to five questions they are asked most often about tariffs and their impact on the U.S. economy.
Tariffs could make your hobbies more expensive, especially the nerdy ones. And on Slate, kate lindsay wrote about how the trade wars have impacted knitters.
Food prices could be especially hard hit. Take coffee: Prices are up 33% from a year ago, according to Bureau of Labor Statistics data, and could soar even higher thanks to tariffs on Brazil.
Did you know businesses could recoup $200 billion from the federal government if Trump loses his tariff lawsuit? Importers could also seek refunds.
Indie jewelry designers on navigating the tariff uncertainty: “I think this is the most volatile I’ve ever seen the market,” said Reema Chopra, the founder of Khepri Jewels. “Every morning, I’m numb.”
Susan Orlean on shopping at SSENSE and a surprise tariff bill.
Last month, Matt Stoller wrote about dynamic pricing and how big-box stores are trying to trick us into missing the price hikes. (Thanks to Ky for flagging in a recent Purse chat!)
Friends of The Purse
A day after I wrote about being a huge failure at ever sticking to a 30-day challenge, Alicia upped the ante, and announced her own 100 day challenge in her newsletter Money Moves. I’m rooting for her!
Bethel Habte of Deconstructing Money looked through her old diary entries and pondered whether we can ever get rid of our money worries.
Over at Dumb Rich, Ariel LaFond is comparing the cost of NYC preschools versus colleges, and it’s nuts but also not surprising for those of us in the trenches.
Along those lines, Heather Boneparth tackled all those pesky college expenses you might not be thinking about in her excellent Invisible Costs series on The Joint Account.
The kids might be back to school, but Rachel Lipson has a really good roundup of her summer travel MVPs in her newsletter, Brooklyn Family Travelers. I might finally break down and buy the sunscreen stick she swears by
In Money Changes Everything , Ally Jane Ayers offers really good advice on what to know when looking for financial help.
Other things we love
This conversation between Amy Poehler and Aubrey Plaza for Poehler’s podcast, Good Hang, had me in my feelings. Their show Parks and Recreation feels very much of a different era but I always love these two together. - Alicia
In The Atlantic, Jordan Michaelman asks, “What’s the point of a high school reunion?” I went to my 20th, and the highlight was getting a hotel room with my high school best friend and staying up all night talking and laughing. I say go to your reunion if you’ve got a friend going with you. - Lindsey
This story on facelifts in The Cut is a lot, but also, it’s hard to look away. And the price tag—$45,000 for a deep-plane facelift—is eye-popping! - Lindsey
There’s been a lot of discourse recently about the author Elizabeth Gilbert thanks to her controversial new memoir, but I appreciated this profile of Gilbert by Jia Tolentino in The New Yorker. - Alicia
The best money we spent this week
I paid $109 for a new filing cabinet for my home office, and everything already looks so much more organized. - Alicia
I’m obsessed with the little coffee shop in my neighborhood, and I popped in this week to grab an Americano and chat with the owner. It was $4.90 for the coffee (included a tip), but it feels like money well spent supporting a local business. Also, the coffee is delicious. - Lindsey
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The most likely reason that the Lego's were not $60 at Walmart is due to the fact that they probably anticipated the tariffs and pre-order extra large supplies. Something a smaller store can't do. Now they are gradually raising the prices to create less consumer shock. However, if the tariffs hold then the next order Walmart makes to Lego will reflect the full tariff and the price for Americans will go up to $60.
Remember too that the price Americans will pay will be higher than what consumers in other countries pay. Many US companies are setting up bases in other countries. That allows them to ship from the manufacturing country, say China, to a middle country, say Taiwan, and then avoid tariffs when selling to non-US markets. So a US company will be selling their product at a lower cost in Japan or Europe than they will in the US.
It's all really and truly just a huge sales tax on American citizens.
Tariffs are terrifying.
I have stocked up on everything possible — from coffee to clothing. (I’ve had to replace pretty much 100 percent of my wardrobe after weight loss. I normally buy very few pieces each year. This is an expense I did not budget for.) Stocking up only helps short-term. You will eventually run out and need to repurchase.
My husband is a buyer, often purchasing metal from all over the world, and thus deals directly with tariffs. It is nuts how much this is adding to the cost of goods, including goods made in American factories, because supply chains are complicated and lots of things are only available from other countries. I think the average person still doesn’t understand this.
I recently wrote about the fact that well-off folks are indeed driving most of the spending. Poor and lower-middle class families can’t. And while we’d all love to just earn more, that’s not exactly easy.
I think we are headed for a very difficult, even cataclysmic time. The new normal won’t be normal. THANK GOD we paid off our mortgage this week!!! We will at least have housing covered.