US Wholesale Prices Remain Stable Despite Concerns Over Tariffs
Wholesale inflation in the US stayed under control last month, with prices unchanged despite fears of tariff impacts. The producer price index showed no increase from May, with a modest year-over-year rise. Core prices also remained steady, indicating a stable market. Analysts are monitoring the situation closely amid ongoing trade policy changes.
U.S. wholesale inflation cooled last month, despite worries that President Donald Trump’s tariffs would push prices higher. The Labor Department reported that the producer price index was unchanged last month from May after rising 0.3% the previous month. June wholesale prices rose 2.3% from a year earlier, the smallest year-over-year gain since September. Both measures came in below what economists had expected.
Excluding volatile food and energy prices, core producer prices were also unchanged from May and up 2.6% from June 2024. The report on wholesale inflation arrived a day after consumer prices last month rose 2.7% from June 2024, the biggest year-over-year gain since February, as Trump’s sweeping tariffs pushed up the cost of goods.
Bradley Saunders, North America economist at Capital Economics, noted a 0.3% increase in core wholesale goods prices, with furniture prices rising 1% from May and home electronics 0.8%. Producer prices at steel mills fell 5.5% despite tariffs. Some companies bought products before tariffs were imposed, keeping prices low, but inventories are running low.
The producer price report showed auto retailers' profit margins dropped 5.4%, indicating they absorbed the cost of tariffs. Wholesale prices can predict consumer inflation trends. Inflation rose sharply in 2021, prompting Fed rate hikes. The Fed is cautious this year due to uncertainty over the impact of trade policies.
According to the source: ABC News - Breaking News, Latest News and Videos.
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