U.S. wholesale inflation surged unexpectedly last month, signaling that President Donald Trump’s sweeping taxes on imports are pushing costs up and that higher prices for consumers may be on the way.
The Labor Department reported Thursday that its producer price index—which measures inflation before it hits consumers—rose 0.9% last month from June, the biggest jump in more than three years. Compared with a year earlier, wholesale prices rose 3.3%.
The numbers were much higher than economists had expected.
Prices rose faster for producers than consumers last month, suggesting that U.S. importers may, for now, be eating the cost of Trump’s tariffs rather than passing them on to customers.
That may not last.
“It will only be a matter of time before producers pass their higher tariff-related costs onto the backs of inflation-weary consumers,” writes Christopher Rupkey, chief economist at fwdbonds, a financial markets research firm.
Excluding volatile food and energy prices, so-called core producer prices rose 0.9% from June, the biggest month-over-month jump since March 2022. Compared with a year ago, core wholesale prices rose 3.7% after posting a 2.6% year-over-year jump in June.
Wholesale food prices rose 1.4% from June, led by a 38.9% surge in vegetable prices. The price of home electronic equipment gained 5% from June. Both are heavily imported in the U.S.
