The wholesale price measure showed no change in June, providing conflicting indications as to whether tariffs threaten to promote inflation in the coming months.
Producer price indexes remained flat, according to the Bureau of Labor Statistics seasonally adjusted numbers reported Wednesday. Economists surveyed by Dow Jones were looking for a 0.2% increase.
The same was true for Core PPI, which was also expected to show an increase of 0.2%.
In conjunction with Tuesday’s release of the Consumer Price Index, data suggests that President Donald Trump’s tariffs show only minor bites in the US economy and prices of goods and services.
The number of headline and core wholesale inflation was curtailed, but the final demand product price rose 0.3%, offset by a 0.1% decline in services. Within the product category, tariff-sensitive communications equipment recorded a profit of 0.8%. Core product prices also rose 0.3%.
At the same time, PPI levels in May, initially reported as a 0.1% increase, saw an upward revision to gain of 0.3%. According to BLS, a 0.3% gain on the product is its biggest profit since February.
Compared to the previous year, the headline PPI increased by 2.3%, but was good at 2.7% in May, the lowest level since September 2024. Core PPI was 2.6% per year, the lowest profit since July 2024.
Stock market futures rose following the report, but Treasury yields fell.
On Tuesday, the BLS reported that the consumer price index, which measures how much consumers pay for goods and services, rose 0.3% per month, showing an annual inflation rate of 2.7%. Core inflation was 2.9% per year.
All BLS measurements for annual inflation exceed the 2% Fed’s target. But Trump repeated his request on Tuesday that the Fed would begin cutting benchmark interest rates as a way to reduce US borrowing costs.
However, the market is virtually free from cutting back when the Fed takes place at the end of July, reducing the chances of a September move. Fed officials say they remain cautious about the impact of tariffs on inflation and believe the US economy is in a strong enough position.
Energy prices rose 0.6% in June, while food prices rose 0.2%, according to the PPI release. Within the food category, chicken eggs fell 21.8%.
