U.S. wholesale inflation unexpectedly surged, with the producer price index rising 0.9% from June, the largest increase in over three years. Year-over-year, wholesale prices increased by 3.3%. The rapid rise is attributed to President Trump's import tariffs impacting costs. While producers currently absorb tariffs, they may eventually pass these costs onto consumers. Core producer prices also rose by 0.9%, the highest month-over-month increase since March 2022, with notable surges in food, home electronics, and puzzling increases in profit margins at retail.
The Labor Department reported Thursday that its producer price index rose 0.9% last month from June, biggest jump in more than three years.
Wholesale prices rose 3.3% compared with a year earlier, much higher than economists had expected.
Excluding volatile food and energy prices, core producer prices rose 0.9% from June, the biggest month-over-month jump since March 2022.
Producers may be eating the cost of Trump's tariffs rather than passing them on to customers, but this may not last.
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