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Wholesale prices were unchanged in June, surprising economists who were expecting to see a modest increase.
The Producer Price Index also showed wholesale inflation slowed annually.
Economists said that the data showed that companies and industries reacted to higher tariffs in different ways.
Wholesale inflation showed a surprising slowdown in June.
Wholesale prices in June didn’t rise from May’s levels, according to the Producer Price Index released by the Bureau of Labor Statistics Wednesday.
The flat PPI reading was the result of dropping services prices, which fell slightly in June from the month prior, offsetting a 0.3% increase in the price of goods. Wholesale price growth slowed on a yearly basis, growing 2.3% higher than the same time last year. That’s lower than the 2.7% recorded in May.
Economists are on the lookout for signs that President Donald Trump’s tariffs are pushing up prices as expected. Economists surveyed by The Wall Street Journal and Dow Jones Newswire expected a 0.2% monthly PPI increase.
While the headline numbers were tame, some details of the report suggest tariffs are putting pressure on producers, economists said.
“Overall, the combination of rising input costs and weakening demand for certain services paints a complex picture, consistent with the idea that aggressive trade policies are beginning to drive up costs while simultaneously dampening demand,” wrote Moody’s Analytics Economist Matt Colyar.
While the data showed that the overall impact of tariffs on inflation has so far been mild, Nationwide Financial Markets Economist Oren Klachkin said the report showed that companies and industries were taking different approaches in handling the import taxes.
“With many strategies at companies’ disposal, the pass-through may be lower than initially anticipated,” Klachkin wrote. “Some industries command pricing power while others look to be absorbing the levies.”
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