WASHINGTON (AP) – US wholesale inflation declined last month, suggesting that price pressure has eased for now. But progress may not continue as President Trump Strengthen his trade war.
The Labor Bureau reported Thursday that it has not changed since January after the producers’ price index (tracking inflation before reaching consumers) rose 0.6% in the previous month. Compared to a year ago, producer prices rose 3.2% from a 3.7% increase in January from a year-on-year increase.
Excluding the prices of volatile food and energy, the so-called core wholesale prices fell 0.1% last month from January, the first decline since July. Core producer prices rose 3.4%, below 3.8% year-on-year in January. All the numbers were lower than the economists had expected.
The read comes as Trump threatens to intensify his trade war with a wide range of US trade partners and send inflation higher. He has Effectively imposed a 25% tax (customer duties) on foreign steel and aluminum It’s been painted 20% collection of China’s imports. Over the next few weeks, he plans to impose a 25% tariff on Canada and Mexico, and introduce “mutual tariffs” that are consistent with a higher tax that other countries slap US products. And on Thursday, the president threatened 200% on European wine, champagne and spirits if Europe was pushing tariffs on US whiskey.
Large retailers warn us that consumers are expecting I’ll take back my spending this year Faced with higher costs, partly from Trump’s tariffs.
On Wednesday, the Labor Bureau said Consumer price inflation has slowed down Last month was the first time since September. The consumer price index has risen 2.8% from a year ago, down from a 3% increase in January. Core consumer prices rose 3.1% from the previous year, the lowest increase since April 2021.
Wholesale gasoline prices fell 4.7% last month. Food prices rose 1.7% between January and February, while egg prices rose 28%.
After cutting the benchmark rate three times in late 2024, the Federal Reserve is expected to remain unchanged at next week’s meeting. “We don’t see any argument that the Fed will lower interest rates today’s numbers,” High Frequency Economics’ Carl Weinberg and Mary Chen wrote in commentary on Thursday. “The Fed is currently focusing on the impact of tariffs on future food prices, which focuses on the impact of egg prices on previous (producer price) rises.”
Wholesale prices allow you to see early where consumer inflation may improve. Economists are looking at some of their components, particularly healthcare and financial services, as they flow into the Federal Reserve’s preferred inflation gauge, namely personal consumption expenditure, or PCE, index. Thomas Ryan of Capital Economics noted that some of the wholesale prices supplied to PCE measures, including hospital costs and international airfares, were higher than expected in February.
