Is the Economy Offering Us Tricks or Treats?
Happy Halloween! This is the Breitbart Business Digest weekly wrap, where we tell scary stories about this week’s economic news.
Fed Chair Jerome Powell spooked Wall Street by saying the Fed can’t drive faster than its headlights during a data blackout, Trump pulled off a China truce without handing over Nvidia’s crown jewels, Halloween candy inflation turned out to be more about cocoa than “tarifflation,” fashion proved once again that hemlines are better at describing confusion than forecasting recessions, and America’s kids signaled their faith in choreographed productivity gains by dressing up as characters from Netflix’s K-Pop Demon Hunters for Halloween.
A model wearing a costume based on the character Rumi poses for photographs at the “K-Pop Demon Hunters” themed zone at Everland on September 30, 2025 in Yongin, South Korea. (Han Myung-Gu/WireImage via Getty Images)
A Dark and Foggy Night for the Fed
Jerome Powell gave markets a jump scare this week by warning that investors were a little too sure about a December rate cut. “When you are driving in the fog, you slow down,” Powell said. The fog is the shutdown: the government has blinded the Fed (and the rest of us) to the usual flow of economic data, so even a “data-dependent” Fed is flying instruments-off.
That exposes the awkward secret of data dependency. If missing one jobs report can change the path of monetary policy, are we running a central bank or day-trading the business cycle? The ghost of monetary policy past—who we imagine looks a lot like Paul Volcker—would rattle his chains and tell the Fed to build policy on the cycle, not on whether Commerce got to publish this week.
Meanwhile, the data we do have are sending mixed signals. Headlines are full of scary layoff stories—more on that below—at the same time the growth numbers look solid. As a friend of ours put it: are we supposed to believe the labor market or GDP? This week’s Conference Board consumer confidence report refused to pick a side: households felt a bit better about right now and a bit worse about the future. Are we getting tricks or treats?
Nvidia, Meet Beijing’s Industrial Policy
Donald Trump struck a trade truce with China. Beijing agreed to drop the rare-earth and magnet export curbs, keep buying U.S. soy and Alaskan oil, and act on fentanyl-related production. In return, the U.S. agreed not to slap on the threatened 100 percent tariff and to trim the current tariff stack by 10 percentage points to 47 percent. What Washington did not give up—Trump stressed this—was access to Nvidia’s top AI chips. That was high on Beijing’s list and on the list of U.S. firms that always want to sell into China first and worry about strategy later.
Nvidia boss Jensen Huang has argued that U.S. chip curbs will just help Chinese champions like Huawei. We doubt it. We’ve seen this movie before, and we know how it ends. U.S. companies insist they can “dominate” the China market, only to find out they were just a bridge to domestic production. Does anyone really believe Beijing would let Nvidia squeeze out Huawei for long?
Count Chocula Price Theory
Reuters reported that U.S. retailers were discounting Halloween-themed chocolate because sales were “somewhat soft.” Hershey product volumes at discounters jumped as efforts to pass through higher cocoa costs ran into consumer resistance. Mondelez and Mars were seeing the same thing. This is the real tarifflation lesson: you can’t pass through costs consumers won’t—or cannot—pay.
More generally, that’s just not how prices work. Consumer prices are not an assembly of the costs of production of goods. Instead, the cost of production—which includes the margins of retailers and manufacturers—is controlled by the price the final good is able to command. We’re thinking of dressing up as Ludwig Von Mises this Halloween and just horrifying everyone with lectures on price theory.
And notice: chocolate and coffee prices are up everywhere. If tariffs were the main culprit, you would expect a U.S.-only wedge—higher here, softer abroad. Instead it’s global. That tells you this is mostly a supply story, not a “Trump tariffs made Halloween expensive” story.
The Long-Lag Skirt Index
Hemline theory allegedly tells us that when skirts and dresses become shorter, the economy is doing well. Longer hemlines supposedly indicate economic sluggishness. So what are hemlines doing now?
Vogue reports that the road is foggy. Apparently, autumn runways had hemlines stretched in both directions:
”The autumn runways had hemlines stretched in both directions. Rick Owens sent out maxi-skirts with thigh-high slits, slashed open from mid-thigh down. Miu Miu veered into librarian chic – skirts grazed the knees and were paired with knitted cardigans. Coperni paired a micro miniskirt with a zipped leather jacket and split-toe sneakers, evoking a sharp, femme fatale energy. If there’s a common thread on the autumn runways, it’s that no single skirt trend dominates.”
That seems about right. Mixed signals everywhere.
The concept of hemlines as economic indicators was allegedly launched by George Taylor, an economist at Wharton who in 1926 argued that in booming economic times many women tended to wear shorter skirts to show off their silk stockings. When the economy turned sluggish, women lowered their skirts to hide that they couldn’t afford stockings. That particular theory seems unlikely to hold in our current era.
The most recent study of hemlines and the economy came from Marjolein van Baardwijk and Philip Hans Franses of the Econometric Institute Erasmus School of Economics. They examined monthly data on hemlines from 1921 to 2009, and compared these to the National Bureau of Economic Research chronology of the economic cycle. Sadly for hemline watchers, they couldn’t find any evidence that hemlines predict economic performance.
They did find, however, that hemlines reflect the economy with a three-year to four-year delay. Sometime around three years after the economy goes into a recession, hemlines plunge toward the ankle. We suppose that today’s mixed hemlines do reflect the fact that there was a lot of certainty about the economy back in 2021 and 2022, when the Fed was insisting inflation was transitory even while Biden was opening the spending spigots to full blast.
So, what to make of Sydney Sweeney’s sheer dress at a recent gala? We’re reading it as a plea for more transparency in economic data.
As far as we know, no one has formalized a Halloween costume indicator. This year’s trendiest costumes are from Netflix’s K-Pop Demon Hunters. That seems bullish. If the culture thinks a synchronized, good-looking team can banish evil with music and discipline, that’s basically a pro-productivity narrative. But maybe it’s just a signal that we’re in a k-shaped economy, with some parts doing well and others struggling.
The post Breitbart Business Digest: The K-Pop Demon Hunter Economy appeared first on Breitbart.
