Rising PPI data challenges Donald Trump's claims as wholesale inflation spikes, signaling higher costs for U.S. consumers. Photo/X.
US President Donald Trump’s claims that rising prices in the country do not affect the American economy dealt a blow after the release of recent inflation data. The data came at a time when Trump’s tariffs were coming into effect against countries worldwide.
The Producer Price Index (PPI), released Thursday, revealed a sharp increase in wholesale prices, surpassing economists’ predictions and signaling that higher costs could soon affect American consumers.
The PPI rose 0.9 percent last month, excluding the volatile food and energy sectors, marking its largest monthly increase since June 2022. Economists had projected a much smaller rise of 0.2 percent.
On a year-over-year basis, wholesale inflation rose by 3.3 percent, representing the largest annual increase since February.
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These figures present a challenge for the president, who has consistently urged the Federal Reserve to cut interest rates while expressing confidence that tariffs would not burden American shoppers.
While the PPI is not monitored as closely as the Consumer Price Index (CPI), it remains a key indicator of rising prices across the economy.
Economists warn that a CPI spike is next. Peter Schiff, chief economist at Euro Pacific Asset Management, made similar comments in a post on X.
“So much for rate cuts. I wonder who Trump will fire for rigging the PPI to make him look bad.”
Trump previously dismissed concerns about tariffs affecting domestic prices, emphasizing that foreign exporters, rather than U.S. consumers, would bear the cost.
Trump dismissed Bureau of Labor Statistics Commissioner Erika McEntarfer on August 1, just hours after the July jobs report revealed a significant slowdown in job growth.
“So much for foreigners paying tariffs. If they did, PPI would be falling,” wrote **Joseph Brusuelas**, chief economist at RSM US, on X. He added that the notion of foreign exporters absorbing tariffs “got destroyed,” and predicted that wholesale inflation would inevitably reach consumers.
“We’re going to have some issues with pricing around the holidays,” Brusuelas said on the Schwab Network, highlighting potential challenges for American shoppers in the coming months.
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Zubair Amin is a Senior Journalist at NewsX with over seven years of experience in reporting and editorial work. He has written for leading national and international publications, including Foreign Policy Magazine, Al Jazeera, The Economic Times, The Indian Express, The Wire, Article 14, Mongabay, News9, among others. His primary focus is on international affairs, with a strong interest in US politics and policy. He also writes on West Asia, Indian polity, and constitutional issues. Zubair tweets at zubaiyr.amin
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