US producer inflation highest in three years in July

AFP :

US producer price inflation bounced in July to its highest reading since 2022, data showed Thursday, with underlying signs that businesses are facing pressures from President Donald Trump’s tariffs.

The rise in services costs exceeded that in goods, contributing to a markedly larger advance than analysts expected.

But economists noted that the headline increase might be overstated — boosted by a range of volatile factors — even as there are also price gains in goods exposed to tariffs.

The producer price index (PPI) rose 0.9 percent on a month-on-month basis after a flat reading in June, said the Department of Labor.
A Briefing.com analyst consensus forecast expected a much smaller jump of 0.2 percent.

The PPI measures changes in producers’ prices, and the report is seen by some as a bellwether for what consumers could face in the months ahead if firms choose to pass on more costs.

On Wall Street, all three major US indexes retreated after the report but generally shook off early losses.

Businesses have been grappling with Trump’s sweeping tariffs after he targeted most trading partners with a 10-percent levy this year, alongside steeper levels on sectors like steel and aluminum.

The latest numbers took the overall PPI figure to 3.3 percent from a year ago, said the Bureau of Labor Statistics.

The cost uptick in goods was 0.7 percent while that of services was 1.1 percent — marking the biggest such jump since March 2022 as well.

While the advance was “broad-based” in July, more than three-quarters can be traced to services, the Labor Department said.