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The producer price index, a measure of wholesale costs, showed no change in June, against the forecast for a 0.2% increase. The same was true for the core PPI.
Though the numbers for headline and core wholesale inflation were subdued, final demand goods prices rose 0.3%, but were offset by a 0.1% fall in services.
Combined with Tuesday’s consumer price index release, the data suggests that President Donald Trump’s tariffs are indicating only a marginal bite on the U.S. economy.
A measure of wholesale prices showed no change in June, providing a conflicting sign over whether tariffs threaten to boost inflation in the coming months.
The producer price index was flat, according to seasonally adjusted numbers from the Bureau of Labor Statistics reported Wednesday. Economists surveyed by Dow Jones had been looking for an increase of 0.2%.
The same was true for core PPI, which also was expected to show a 0.2% rise.
Combined with Tuesday’s consumer price index release, the data suggests that President Donald Trump’s tariffs are indicating only a marginal bite on the U.S. economy and the prices for goods and services.
Though the numbers for headline and core wholesale inflation were subdued, final demand goods prices rose 0.3%, but were offset by a 0.1% fall in services. Within the goods category, tariff-sensitive communication equipment posted a gain of 0.8%. Core goods prices also rose 0.3%.
At the same time, the PPI level for May, initially reported as a 0.1% increase, saw an upward revision to a 0.3% gain. A 0.3% gain for goods is the biggest gain since February, the BLS reported.
On a year-over-year basis, the headline PPI was up 2.3%, compared with 2.7% in May and good for the lowest level since September 2024. The core PPI was at 2.6% on an annual basis, the smallest gain since July 2024.
Stock market futures rose following the report while Treasury yields fell.
The BLS on Tuesday reported that the consumer price index, which measures what consumers pay for goods and services, showed a monthly increase of 0.3% and an annual inflation rate of 2.7%. Core inflation was at 2.9% annually.
All of the BLS measures for annual inflation are above the Federal Reserve’s 2% target. However, Trump on Tuesday repeated his demands that the Fed start lowering its benchmark interest rate as a way to help reduce borrowing costs for the U.S.
However, markets are pricing virtually no chance of a cut when the Fed meets at the end of July, and have been reducing odds for a September move. Fed officials have said they remain cautious about the impact tariffs will have on inflation and believe the U.S. economy is in a strong enough position now that they can wait to see the impacts before acting on rates.
According to the PPI release, energy prices rose 0.6% in June, while food prices increased 0.2%. Within the food category, chicken eggs tumbled 21.8%.
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President Trump said the agreement would partly walk back some of the steep tariffs he threatened on the country last week. Indonesia’s president called Mr. Trump a “tough negotiator.”Indonesia’s president, Prabowo Subianto, confirmed on Wednesday the broad outlines of a trade agreement with the United States that was reached after what he called “tough negotiations” with Washington.Under the terms, which President Trump on Tuesday called a “great deal for everybody,” U.S. exports to Indonesia would face no tariffs, while Indonesian goods would be charged a tariff of 19 percent in the United States.Mr. Prabowo confirmed in brief remarks in Jakarta that the two nations had “finally” reached an agreement. “We understand their interests, and they understand ours,” he added.The announcement comes as the Trump administration is trying to close trade deals with numerous countries, and threatening to impose double-digit tariffs on the exports of two dozen nations as of Aug. 1 if agreements aren’t reached.U.S. and Indonesian officials have been engaged in trade talks for several months. Last week, Mr. Trump threatened Indonesia with a 32 percent tariff on its exports in a letter posted to his social media account, as he sent similar form letters to dozens of countries. Indonesian officials said they were surprised to receive the letter, given that talks had been going well.“I think it’s a good deal for both parties,” Mr. Trump said, while saying that a forthcoming deal with India would also follow similar lines. He added that Indonesia also had minerals and “very high-quality copper, which we’ll be using.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More
UK inflation rose to a hotter-than-expected 3.6% in June after reaching 3.4% in May.
The inflation data will be closely looked at by the Bank of England ahead of its next meeting in August.
The U.K. is battling stubbornly high inflation rate and lackluster economic growth.
A one pound price label in bowls of produce on a grocery stall at East Street Market in London, UK, in spring 2024.
Bloomberg | Bloomberg | Getty Images
The U.K.’s annual inflation rate hit a hotter-than-expected 3.6% in June, according to data released by the Office for National Statistics (ONS) on Wednesday.
Economists polled by Reuters had anticipated inflation would reach 3.4% in the twelve months to June, after it hit 3.4% in May.
June core inflation, which excludes more volatile energy, food, alcohol and tobacco prices, rose by an annual 3.7%, up from 3.5% in the twelve months to May.
The British pound rose almost 0.2% against the dollar, to $1.3406, following the data release.
“Inflation ticked up in June driven mainly by motor fuel prices which fell only slightly, compared with a much larger decrease at this time last year,” Richard Heys, acting chief economist at ONS, commented on the data.
“Food price inflation has increased for the third consecutive month to its highest annual rate since February of last year. However, it remains well below the peak seen in early 2023,” he added.
U.K. Finance Minister Rachel Reeves said the data showed that “working people are still struggling with the cost of living” and said the government had more work to do to help ease the pressure on consumers.
The inflation data will be closely watched by the Bank of England as it tries to determine the trajectory for interest rates amid a stubbornly high inflation rate and lackluster economic growth.
In an inflationary environment, central banks usually opt to maintain a higher key interest rate to encourage more saving and less spending in order to slow down price increases. The U.K.’s low-growth environment — the latest data showed the economy unexpectedly shrank again in May — is also a worry for the BOE, however.
As such, economists expect BOE policymakers to cut rates by 25 basis points at their next gathering in August.
“While price growth remains far above target, the U.K. economy contracting for a second straight month in May means the Bank is likely to look through the volatility in this inflation reading and proceed with a rate cut in August,” Adam Deasy, economist at PwC, said Wednesday in emailed comments.
“Tomorrow’s payroll data release, the last major data release before the next MPC meeting, may spark the Bank into action to support an economy that increasingly looks like it needs a lift.” More
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