This week we saw two widely watched inflation reports: one on Tuesday that looked fairly normal, and another on Thursday that made many take a closer look at the numbers.<\/p>\n
If you only go by the headlines, you might get the impression that prices are both flat and rising at the same time. In reality, consumer inflation was moderate: housing costs and meat products rose, while gasoline fell.<\/p>\n
However, wholesale inflation, what businesses feel in producing goods, tells a different story. On Thursday the Producer Price Index for July rose 3.3% year over year \u2013 the fastest pace since June 2022.<\/p>\n
Even Wall Street, which lately has been absorbed in concerns about artificial intelligence and expectations of lower rates, paused briefly after the report and then nearly stabilized through the day.<\/p>\n
How the data affect everyday spending and prices<\/p>\n
In the end, businesses pass a portion of costs onto consumers: from tariffs to higher prices for goods due to other factors. This is how tariffs work: costs are passed on to households, even though governments claim otherwise.<\/p>\n
\n\u201cTariff duties won\u2019t vanish into thin air,\u201d wrote Peter Bukvar, chief investment officer at Bleakley Financial Group. \u201cAnd if consumer prices don\u2019t rise further at a rapid pace, we\u2019ll face a hit to margins. Choose your poison.\u201d<\/p>\n
\u2013 Peter Bukvar\n<\/p><\/blockquote>\n
In the coming months, cost increases may occur not only from tariffs: higher housing costs, though tied to a shortage of affordable housing, also add to rising prices in other categories \u2013 coffee, eggs \u2013 due to weather problems and the threat of avian flu.<\/p>\n
This dynamic creates political risks ahead of upcoming elections: Pew Research polls show that presidential approval stands at about 38%, while 60% do not support him.<\/p>\n
According to Pew, the administration is pushing tariffs and the tax-and-spending bill, which provokes far more discontent than support. The full impact of tariffs on consumers\u2019 wallets has not yet been felt, but expectations of higher prices align with rising political risks for the administration.<\/p>\n
On Thursday at an event at the White House, Donald Trump said that inflation has been \u201creduced to an ideal number.\u201d<\/p>\n
\n\u201cInflation has been reduced to an ideal number.\u201d<\/p>\n
\u2013 Donald Trump\n<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"This week we saw two widely watched inflation reports: one on Tuesday that looked fairly normal, and another…\n","protected":false},"author":2,"featured_media":348782,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5311],"tags":[17438,32,476,123472,123471,12,123473,16678,43151,479,14014,49,978,659],"class_list":{"0":"post-348781","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-united-states","8":"tag-consumer-prices","9":"tag-donald-trump","10":"tag-inflation","11":"tag-inflation-reports","12":"tag-inflation-tariffs-prices-the-united-states-inflation-reports-political-risks-donald-trump-consumer-prices-producer-price-index","13":"tag-news","14":"tag-political-risks","15":"tag-prices","16":"tag-producer-price-index","17":"tag-tariffs","18":"tag-the-united-states","19":"tag-united-states","20":"tag-us","21":"tag-usa"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/115037697777547562","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/348781","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=348781"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/348781\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/348782"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=348781"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=348781"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=348781"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}