US Wholesale Inflation
The US inflation on wholesale rose in July, with prices rising at the fastest monthly pace since June 2022, according to new data released on Thursday.
Producer Index
The most recent producer index, which measures the average change of prices, rose by 0.9% from June and increased the annual rate to 3.3%, according to the data of the Bureau of Labor Statistics. This reading exceeds the economists’ predictions of only 0.2% in July and 2.4% annually.
Economic Impact
The readings on Thursday indicate that the inflation fire is starting to heat up, and producers are feeling the effects. "The tariffs begin to burn and the producers feel the inflation fire heat," wrote Chris Rupkey, chief economist at FWDBonds. "It will only be a matter of time before the manufacturers pass on their higher customs costs to the back of the inflation-tired consumers."
Future Prices
PPI serves as a potential bellwether for prices that consumers can see at companies in the coming months. This means that the current inflation rate could be a sign of things to come, and consumers may see higher prices in the near future.
Inflation Confirmation
The PPI report is the final confirmation that inflation is accessible to us. "Today’s PPI report is the final confirmation that inflation is accessible to us. The inflation that cooks in the background was brought up and begins to cook clearly," added Chris Rupkey.
This story develops and is updated.
