President Trump celebrated wholesale inflation declining in August after the Bureau of Labor Statistics reported the Producer Price Index fell .1 percent last month. Economists predicted a .3 percent rise.
The Labor Department reported Wednesday that its producer price index — which captures inflation in the supply chain before it hits consumers — showed that wholesale inflation decelerated in August after advancing 0.7% in July. Wholesale services prices fell 0.2% from July on smaller profit margins at retailers and wholesalers, which might be a sign that those companies are absorbing the cost of President Donald Trump’s sweeping taxes — tariffs — on imports. [...]
Excluding volatile food and energy prices, so-called core producer prices also fell 0.1% from July and were up 2.8% from a year earlier.
The numbers were lower than economists had forecast. [...]
Wholesale prices can offer an early look at where consumer inflation might be headed. Economists also watch it because some of its components, notably measures of health care and financial services, flow into the Federal Reserve’s preferred inflation gauge — the personal consumption expenditures, or PCE, price index.
The drop in producer prices makes it even more likely that the Fed will cut its benchmark interest rate next week for the first time this year. (AP via WTOP)
“The latest PPI report shows there is no inflation — wholesale prices fell and smashed economists’ expectations," said Press Secretary Karoline Leavitt. "President Trump has defeated Joe Biden’s inflation crisis while successfully implementing powerful tariffs, which haven’t hiked prices like the so-called ‘experts’ claimed. This is yet another reason for Jerome ‘Too Late’ Powell to cut the rates immediately to make everyday life more affordable for Americans.”
🚨 "WOW": Wholesale inflation FELL in August — smashing economists' expectations yet again and proving that President Trump's tariffs are having little effect on prices.
— Rapid Response 47 (@RapidResponse47) September 10, 2025
"Boy, I'm surprised — real progress here! 2.6% on year-over-year headline. We were expecting 3.3%!" pic.twitter.com/x6ksNW82Vm
.@AJInsight on the August PPI report: "This is FANTASTIC NEWS. Producer prices MUCH LOWER than we thought... 2.6% was the PPI. We thought it was going to be 3.3%. This is just such wonderful news. I'm thrilled." pic.twitter.com/Q9JhyZgfjj
— Rapid Response 47 (@RapidResponse47) September 10, 2025
CNBC's Becky Quick on wholesale inflation declining in August: "That's a real shocker... the idea that inflation is so much weaker than anticipated." 🔥 pic.twitter.com/RbngmuoL8o
— Rapid Response 47 (@RapidResponse47) September 10, 2025
.@cherylcasone: "That tariff [price] impact... not seeing it — and here we go with a VERY POSITIVE and good inflation report coming out." pic.twitter.com/QzUmnJzHkU
— Rapid Response 47 (@RapidResponse47) September 10, 2025
Allianz Chief Economic Advisor Mohamed El-Erian on tariffs: "There's the exporter, there's the importer, and there's the consumer — and so far, the consumer is carrying the least of the burden." pic.twitter.com/TlYPoILlrC
— Rapid Response 47 (@RapidResponse47) September 10, 2025
"What we're learning is that the final impact on the consumer is MUCH less than people expected," says Allianz Chief Economic Advisor Mohamed El-Erian on tariffs.
— Rapid Response 47 (@RapidResponse47) September 10, 2025
"If the Fed is truly data dependent, the question should be, 'Why not 50 [basis points]?'" pic.twitter.com/5b3dZ6VGfr
Alfredo Ortiz, CEO of Job Creators Network, argued the latest report gives the Fed "even more justification" for cutting the interest rates "by at least 50 basis points" during next week's meeting.
"Thanks to President Trump and Republican policies, small businesses no longer have to worry about runaway inflation that destroys profit margins and alienates customers," he said in a statement. "Now, the biggest threat they face is artificially high interest rates from a politicized Fed. When small businesses can't access credit, they can't reinvest in their businesses and create jobs in their communities. Low and predictable inflation ensures the Fed can finally cut rates to free up capital and empower small businesses to kick start the Main Street resurgence."
Editor's Note: This post has been updated to include White House Press Secretary Karoline Leavitt's statement.