Wednesday’s only tradable US macro update sent mixed messages about pipeline price pressure.
On the face of it, wholesale price growth was much cooler than expected in June. Specifically, the headline PPI gauge printed unchanged from a month earlier, undershooting every estimate collected by Bloomberg. Consensus expected a 0.2% MoM gain. That said, the prior month was revised to show a 0.3% advance versus the initially-reported 0.1% gain.
Similarly, the ex-food and energy index reflected no change in June from May (unrounded it actually showed a slight decline), but was revised to show a 0.4% advance for the preceding readout compared to the 0.1% first-pass estimate.
The services gauge, meanwhile, likewise fell for a second time in three months, helping to offset a 0.3% advance on the goods index.
In the release, the BLS noted that half the decline on the services gauge was attributable to the index for traveler accommodations. Gauges for cars and parts, as well as airfares and food and liquor margins fell too.
On the goods side, the 0.3% gain mentioned above was the largest since February and was attributable, in part anyway, to a pronounced increase on the index for communication-related equipment.
The figures came a day on from a broadly benign CPI release which was parsed relentlessly for evidence of tariff-related inflation. Analysts eventually found that evidence in a measure of core goods prices which excludes the drag from vehicles. That metric showed a 0.6% gain.
The issue here from a domestic political perspective is that it feels like some of us are trying just as hard to ferret out evidence that Trump’s policies are causing inflation as we did to explain why Joe Biden’s policies weren’t.
Is there evidence that tariffs are pushing up prices in some categories? Sure. Is that pressure enough to drive a sharp increase in the broad inflation aggregates? Not yet, apparently. And until it does, Trump’s going to insist on rate cuts.
Anyway, Wednesday’s PPI release was benign for June, but the upward revisions to May’s readouts were large enough to merit mention. I’d also note that the categories which factor into PCE inflation suggest core price growth on the Fed’s preferred measure ran 0.3% last month. That’s too quick to be mandate consistent.
I have been unexpectedly busier than I want to be in the last 2 weeks and only have time to read HReport. Thank you for your excellent coverage- I know I can trust your reporting. This is a perfect example:
“The issue here from a domestic political perspective is that it feels like some of us are trying just as hard to ferret out evidence that Trump’s policies are causing inflation as we did to explain why Joe Biden’s policies weren’t”
In what world do you think that Lutnick and Co wouldn’t Cook the Books to make it seem everything is all good? He has already terminated advisory committee’s to the BLS, has publicly come out and said he wants to change the way GDP is calculated.
I’m not saying that this data is incorrect, but to not question it, just as Trump always questioned Obama’s numbers, would be naive. You have a want to be dictator that wants to control the Federal Reserve, why would he not want to control BLS numbers. What happens if the trust of the economist at the BLS goes away, well, just ask Erica Groshen.
Three things. First, data mis-measurement in the CPI/PPI series is more likely to be a function of staff cuts which constrain the BLS’s capacity to cast a wide net than it is malicious intent, at least initially. Second, Wall Street and independent analysts will get wise to it eventually if there’s persistent mis-measurement, and unless we get to a place where the administration’s forcibly preventing the private sector from disseminating its own estimates, any such discrepancies will become a PR nightmare for Trump. Third, you have to have evidence to support the case for manipulation, otherwise you’re just Trump claiming the 2020 election was rigged — or Trump always questioning Obama’s numbers.
Here: https://heisenbergreport.com/2025/07/16/impugn-the-imputation/
There’s a heck of a lot of people working in government right now with an eye on the exits and an itch to get out. In case you hadn’t noticed, there’s a certain sort of person–the sort who’s naturally inclined towards public service–who absolutely delights in the notion of becoming the next big famous whistle blower. If administration leadership starts trying to “Cook the Books,” we’ll all be reading about it on the front page of the New York Times within days.
This actually points to the easiest reason to disbelieve most conspiracy theories. To pull them off, way too many people have to be involved to keep it secret. As Benjamin Franklin observed (and he actually wrote this, it’s not some apocryphal bit of internet lore), “Three can keep a secret, if two of them are dead.” My favorite is chem-trails. Never mind trying to distribute chemicals to the populace via the single least efficient method imaginable, can you imagine the scale such an operation would require?
Besides, Trump doesn’t need to cook the books. He just makes things up (The ECB has cut rates ELEVENTEEN TIMES!) and they get printed as facts.
Am I correct in thinking that PPI does not include imports?