US producer prices unchanged with wholesale inflation under control
By JOHN DOE, Staff Writer
WASHINGTON (AP) — The latest data from the Labor Department shows that U.S. wholesale inflation remained stable last month, defying concerns over the impact of President Donald Trump’s tariffs on pricing.
In June, the producer price index stayed flat compared to May, following a 0.3% increase the previous month. Year-over-year, wholesale prices were up 2.3%, marking the smallest gain since September and falling below economists’ expectations.
Core producer prices, excluding food and energy, also showed no change from May and were up 2.6% from June 2024.
The report on wholesale inflation comes on the heels of a recent Labor Department report indicating a 2.7% increase in consumer prices from June 2024, the largest year-over-year rise since February, attributed to Trump’s tariffs.
While consumer prices surged, wholesale prices didn’t follow suit, with goods prices increasing by 0.3% in June, mainly driven by higher steel and iron prices.
Economists closely monitor wholesale prices as they can provide insights into future consumer inflation trends, especially since components like health care and financial services contribute to the Federal Reserve’s inflation gauge, the PCE index.
Inflation, which saw a resurgence in 2021 after COVID-19 lockdowns, led the Fed to raise interest rates 11 times in 2022 and 2023. However, the central bank later cut rates three times in response to easing inflation. This year, the Fed is cautiously observing the impact of Trump’s trade policies on inflation before considering any further rate adjustments.
Trump’s calls for rate cuts have raised concerns about the Fed’s independence, as the central bank navigates the delicate balance between economic growth and price stability.
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