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The
producer price index — which tracks inflation before it hits
consumers — fell 0.5% last month from March, the first drop
since October 2023 and the biggest in five years. Compared to a
year earlier, producer prices rose 2.4% last month, decelerating
from a 3.4% year-over-year gain in March, the U.S. Labor
Department reported Thursday.
Excluding volatile food and energy prices, so-called core
wholesale prices dipped 0.4% from March and rose 3.1% from a
year earlier.
Economists had forecast that producer prices rose modestly in
April.
Services prices fell 0.7%, the biggest drop in government
records going back to 2009, on shrinking profit margins at
wholesalers and retailers. Wholesale food prices fell 1%, and
egg prices plunged 39%, though they are still up nearly 45% from
a year ago because of bird flu.
On Tuesday, the Labor Department reported that consumer prices
rose just 2.3% last month from April 2024 — smallest
year-over-year gain in more than four years.
Economists have predicted that Trump’s tariffs would drive up
prices, and many expect the impact to show up in June or July.
Still, Trump’s tariffs are ever-changing, so it’s hard to
forecast their economic impact. On Monday, for instance, Trump
unexpectedly agreed to a massive de-escalation of his trade war
with China — third-biggest source of U.S. imports — by scaling
back his taxes on Chinese products to 30% from 145%; China
slashed its retaliatory tariffs on U.S. products from 125% to
10%.
"Tariffs have yet to make much of a mark on pricing, though it’s
likely just a matter of time,'' Sal Guatieri, senior economist
at BMO Capital Markets, wrote in a commentary.
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