Vice President JD Vance’s recent remark appeared to not land as well as he intended.
Vance on Wednesday responded to a social media user on X, who claimed that the producer price index (PPI), a measure of wholesale costs, showed no change in June, after experts initially projected a 0.2% increase, according to new data from the Bureau of Labor Statistics. Wholesale prices also rose 2.3% from a year earlier, which is the smallest year-over-year gain since September.
“It’s almost like the economics profession doesn’t fully understand tariffs,” Vance posted on X, racking up thousands of likes.
Social media users, however, were quick to point out that Vance did not mention that imports — a staple of Trump’s signature tariff policies — are not included in the PPI threshold. According to the Bureau of Labor Statistics website, the PPI “does not include imports, because imports are by definition not produced by domestic firms.”
“Imports compose a substantial portion of the [consumer price index (CPI)], especially within the apparel and new-cars component, and their inclusion in the CPI and exclusion in the PPI for personal consumption causes a substantial difference between the two indexes,” the website continues.
One user capitalized on the difference: “Tariffs only indirectly affect PPI through later stages of the production process.
The user said that there is “clear evidence that tariffs are affecting the prices of import-exposed goods,” pointing to new data from the Bureau of Labor Statistics released Tuesday which revealed that inflation rose to its highest level in four months in June. The report found that consumer prices 0.3% last month, pushing up the annual inflation rate to 2.7%.
“Hello Mr Vance… PPI doesn’t include imports… Hope this helps,” a different user wrote.
Another user shot back: “It’s almost like JD Vance doesn’t fully understand the economics profession.”
Sven Henrich, a financial market strategist, used Vance’s words to write about a “fun economic profession fact.”
“The Producer Price Index (PPI) excludes import prices & hence does not directly reflect the impact of tariffs. PPI measures domestic producer prices only per the Bureau of Labor Statistics,” Henrich wrote.
A different user said, “Wrong. We can see the effects of tariffs on prices pretty clearly. Compare the change in prices across tariff-affected and unaffected industries.”
“Super smug for a guy who doesn’t know what PPI measures,” someone added.
President Donald Trump asked a room of House Republicans on Tuesday night if he should fire Federal Reserve Chair Jerome Powell, according to reports. After receiving support in doing so, the president claimed he would, a senior White House official said. But on Wednesday, Trump said it would be “highly unlikely” to remove him from the post.
“We’re not planning on doing it,” Trump told reporters in the White House. “I don’t rule out anything…”
No president has ever attempted to fire the top central banker. The president has railed against Powell, specifically, after he did not lower a key borrowing rate last month.
Trump said he was “surprised he was appointed,” despite the president himself nominating Powell to the role during his first term.
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