“Starting on day one, we will end inflation and make America affordable again, to bring down the prices of all goods.”
A day after a new CPI report showed consumer prices surging 3.8% annually — the highest rate in nearly three years — today’s Producer Price Index report shows the pain is far from over. The Iran war is squeezing U.S. businesses and it’s likely to cause them to raise prices for consumers even more. Wholesale prices, which measure what producers pay and signal what consumers will pay next, posted their largest monthly gain since March 2022 and their largest annual increase since December 2022, topping every forecast from economists. Economists called the report an “alarm bell” and say the PPI report shows that inflation is now “sticky and accelerating.”
Trump’s reckless war in Iran is straining global supply chains and driving up costs across goods and services alike. Trump promised to lower costs on day one. Instead, working families are getting hit twice — first at the checkout counter, and now in the pipeline of prices that haven’t reached them yet.
WHOLESALE PRICES SURGE
- Wholesale prices posted their highest annual increase in more than three years — up 6.0% year-over-year — signaling more inflation ahead as pipeline costs intensify. (CNBC)
- The PPI rose 1.4% for the month — the largest monthly gain since March 2022 — far exceeding the 0.5% consensus forecast among economists surveyed by Reuters and Dow Jones. (CNBC / Reuters)
- Gasoline prices at the wholesale level surged 15.6% for the month alone, accounting for over 40% of the entire advance in goods prices. (CNBC)
- Truck freight costs jumped 8.1% for the month — the largest increase in data going back to 2009. (Bloomberg)
- Transportation and warehousing services prices jumped 5.0% for the month overall. (BLS)
- The services index rose 1.2% — its biggest monthly jump since March 2022 — with two-thirds of that increase driven by a 2.7% rise in trade services margins, a sign that tariff costs are beginning to have a larger impact on prices. (CNBC)
- More pain may be on the way: economists now estimate the Fed’s preferred inflation gauge — core PCE — could rise as much as 0.4% in April, pushing the annual rate as high as 3.4%, up from 3.2% in March. (Reuters)
- “This report will set off alarm bells at the Fed and add fuel to the political conversation about affordability. They suggest that energy price increases are indeed ‘bleeding’ into core prices at the producer level.” — Carl Weinberg, Chief Economist, High Frequency Economics (Bloomberg)
- “Inflation is sticky and accelerating. The core reading confirms a deeper structural trend, especially in services. The Hormuz crisis is aggravating the problem, but this goes way beyond oil.” — David Russell, Global Head of Market Strategy, TradeStation (CNBC)
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