Wholesale prices in the U.S. stayed the same in June, showing that tariffs may not be driving up costs as much as feared. The Producer Price Index (PPI), released Wednesday by the Bureau of Labor Statistics, showed no change on a seasonally adjusted basis. Economists had expected a rise of 0.2%.
Core Prices Also Show No Change
The core PPI, which leaves out food and energy prices, also stayed flat. This again fell below predictions of a 0.2% increase. The numbers suggest that President Trump’s tariffs are not yet causing strong inflation pressures.
This report came just one day after the Consumer Price Index (CPI) showed a monthly increase of 0.3% in consumer prices. On an annual basis, CPI inflation reached 2.7%, while core inflation rose to 2.9%.
Some Prices Rise, Others Fall
While overall wholesale prices didn’t change, there were some ups and downs. Final demand goods prices went up 0.3%, driven by a 0.8% increase in communication equipment. These items are sensitive to tariff changes. However, prices for services fell by 0.1%, balancing the overall index. Core goods prices rose by 0.3%.
The PPI for May was also revised. It was first reported as a 0.1% gain, but now shows a 0.3% increase—the highest since February.
Yearly Inflation Slows Slightly
Compared to last year, headline PPI rose 2.3%, down from 2.7% in May. This is the lowest rate since September 2024. The core PPI increased by 2.6% over the year, also a slowdown from previous months.
Energy prices went up 0.6% in June. Food prices rose by 0.2%, although some food items saw steep drops. For example, the price of chicken eggs fell 21.8%.
Markets React and the Fed Stays Cautious
After the report, stock futures rose while Treasury yields dropped, showing that investors see inflation as under control.
Even though inflation is still above the Federal Reserve’s 2% target, the central bank is not rushing to cut interest rates. President Trump again called for lower rates, hoping to reduce borrowing costs. But the market sees almost no chance of a rate cut in July, and expectations for a September cut are also dropping.
Fed officials say the U.S. economy is still strong, and they want to see more data before making any changes.