Posted on 09/10/2025 6:35:04 AM PDT by lasereye
U.S. producer prices fell unexpectedly last month, dropping 0.1% from July.
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.
Compared to a year earlier, producer prices rose 2.6%.
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.
The wholesale price report came out day before the Labor Department releases its consumer price index. The CPI is expected to show that consumer price inflation picked up slightly last month, rising 0.3% from July, an uptick from a 0.2% increase the month before. Compared with a year earlier, consumer prices are expected to have risen 2.9% in August, up from a 2.7% year-over-year increase in July.
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.
Trump has been pressuring the central bank to cut rates. And there are increasing signs that the economy is weaker than previously thought.
(Excerpt) Read more at finance.yahoo.com ...
The drop in the PPI could be due in part to a slowing economy. The only question now seems to be whether the Fed will cut the discount rate by 25 or 50 basis points. I am guessing the incompetent Powell will do 25 points.
U.S. producer prices fell “””unexpectedly””””
Do they ever expect anything?............😑
There is that word again, I do not think it means what they think it means.
lots but they are often disappointed
“prices fell unexpectedly last month”
We need to get a better group of expectors. The current bunch always seems to be wrong.
They also never expect a Spanish Inquisition but that’s another thread. :)
Where’s the tarifflation, dammit! lol
They use analog tools in a digital world.
On the other hand, one datum point does not make a trend. It’s good news, but we need a few months of good news to make a trend.
That’s my take, too...disappointment that prices are leveling off or falling slightly so they can’t continue to bludgeon Trump with the tariff.
Mass media outlets, deeply disappointed.
Not to worry, it’ll be revised any day to show a result unfavorable to President Trump.
Well NOBODY expects that!
Reminder — 2.9% is 50% above the Fed’s target of 2%.
As for “unexpectedly”, there are projections prior to the report. If a report does not match them, then its result is unexpected. By definition.
A useful awareness has to do with earnings beats of companies. Analysts project an earnings number for a quarterly report. If it is not exactly that when reported, then the report was unexpected.
But that is how Wall Street works. Analysts are paid to underestimate so that a report of earnings is a “beat”. Misses are rare.
The CPI methodology is on the website (today was PPI, not CPI). What is done is households are surveyed and asked what % of total spending a given category is for their household — like food, shelter, transportation etc.
Once that proportion is defined, then samples are taken of prices of those categories. Combine the two numbers and you get overall inflation.
Except . . . PCE is superior. CPI is urban. It also ignores costs a household does not pay (like employer paid healthcare premiums). PCE DOES capture those household costs not directly paid, and this is across all regions, not only urban.
Comrade Powell needs to e sent to cold country to do paper work in a tent.
That’s exactly what they’re all thinking
How the term came to be trademarked.
https://www.aei.org/articles/pro-obama-media-always-shocked-by-bad-economic-news/
Pro-Obama Media Always Shocked by Bad Economic News
By Michael Barone
Washington Examiner
May 29, 2011
Unexpectedly!
As megablogger Glenn Reynolds, aka Instapundit, has noted with amusement, the word “unexpectedly” or variants thereon keep cropping up in mainstream media stories about the economy.
“New U.S. claims for unemployment benefits unexpectedly climbed,” reported CNBC.com May 25.
“Personal consumption fell,” Business Insider reported the same day, “when it was expected to rise.”
“Durable goods declined 3.6 percent last month,” Reuters reported May 25, “worse than economists’ expectations.”
“Previously owned home sales unexpectedly fall,” headlined Bloomberg News May 19.
“U.S. home construction fell unexpectedly in April,” wrote the Wall Street Journal May 18.
Those examples are all from the last two weeks. Reynolds has been linking to similar items since October 2009.
Mainstream media may finally be catching up. “The latest economic numbers have not been good,” David Leonhardt wrote in the May 26 New York Times. “Another report showed that economic growth at the start of the year was no faster than the Commerce Department initially reported — ‘a real surprise,’ said Ian Shepherdson of High Frequency Economics.”
Which raises some questions. As Instapundit reader Gordon Stewart, quoted by Reynolds on May 17, put it, “How many times in a row can something happen unexpectedly before the experts start to, you know, expect it? At some point, shouldn’t they be required to state the foundation for their expectations?”
Maybe if they took something like Mucinex, they could expectorate better.
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