U.S. producer prices surge in July as Trump tariffs push costs higher
10 days ago
- #inflation
- #economy
- #tariffs
- U.S. wholesale inflation surged unexpectedly in July, with the producer price index rising 0.9% from June, the biggest jump in over three years.
- Year-over-year wholesale prices increased by 3.3%, much higher than economists had anticipated.
- Core producer prices (excluding food and energy) rose 0.9% from June, the largest month-over-month increase since March 2022.
- Wholesale food prices increased by 1.4%, led by a 38.9% surge in vegetable prices, while home electronic equipment prices rose 5%.
- Some aspects of the report were puzzling, including a significant jump in profit margins at retailers and wholesalers.
- Trump’s tariffs have created economic uncertainty, with businesses unsure about future tariff rates and how to adjust prices.
- The impact of tariffs has been delayed as many importers stockpiled goods before the taxes took effect, but inventories are now diminishing.
- Consumer prices rose 2.7% in July from the previous year, with core consumer prices up 3.1%, both above the Federal Reserve’s 2% target.
- The Fed’s decision-making is complicated by the inflation data, with expectations for a September rate cut potentially being revised.
- Trump’s criticism of the Bureau of Labor Statistics and the firing of its director have raised concerns about political interference in economic data.