(What’s Left of) Our Economy: U.S. Wholesale Prices Tick Up, but Don’t Blame Tariffs

A crucial conclusion coming out of today’s official U.S. report for producer prices:  There’s absolutely no evidence that this September read for wholesale price trends shows businesses struggling with significantly increased costs due to President Trump’s tariffs.  

Starting with the broadest groupings in the headline “final demand” category of the Producer Price Index (PPI), in September, businesses overall charged each other 0.31 percent more for everything they sold each other (meaning goods, services, and what are called “trade services” like transport and other logistics) than they did in August.  That’s the highest monthly result of the calendar year.

But comparing the seven full data months of the second Trump presidency (starting in February)  and the comparable period during the pre-tariff Biden administration period of 2024, shows the opposite trend.  Between February, 2024 and September, 2024, the overall PPI was up by 1.65 percent – much faster than the Trump 2.0 rate of 0.98 percent.

The post-Liberation Day trend is different, but not dramatically so.  From April through September, 2024, overall final demand PPI rose by 1.10 percent.  During the same Trump 2.0 period, the increase was 1.42 percent.

A similar story is told by the core final demand PPI results – the numbers minus food, energy, and trade services supposedly because they’re volatile for reasons having little to do with the economy’s underlying vulnerability to inflation.

The September core monthly PPI result was 0.15 percent – the second highest figure in this calendar year (after January’s 0.35 percent).  

But on a February-September basis, core PPI advanced by 1.97 percent in 2024, but just 1.29 percent in 2025.

The post-Liberation Day reversal has been modest at best.  Between April and September, 2024, core PPI increased by 1.23 percent.  The comparable 2025 rate has been just 1.36 percent.

Developments in final demand PPI for goods alone seems to make tariffs a culprit.  In September, these prices rose by 0.95 percent sequentially – the worst such performance since the 1.67 percent pop in August, 2023. 

Moreover, from February through September, 2024, final demand PPI for goods actually fell by 0.63 percent.  During the same period, they increased by 1.19 percent.

And since Liberation Day, the results were even more discouraging from a “tariff man” perspective.  From April through September, 2024, final demand PPI for goods dipped by 0.60 percent.  But they climbed by 2.19 percent during the same 2025 time span.

But upon closer inspection, tariffs made much less of an impact.  That’s because final demand goods includes those volatile food and energy prices.  And the latter aren’t tariffed at all. In other words, this is the PPI category where you’d expect any tariff effect to show up most prominently.

But final demand PPI minus these categories inched up just 0.17 percent on month in September – their second slowest pace since January’s 0.08 percent.  

Moreover, between pre-tariff-y February and September, 2024, core final demand goods PPI increased considerably faster (by 2.59 percent) than in the comparable 2025 stretch (1.91 percent).

The post-Liberation Day figures show another minor reversal.  The April-September 2025 pace of 1.39 percent wasn’t much hotter than 2024’s 1.04 percent.

As usual, since Mr. Trump’s tariff policy isn’t set in stone (to put it kindly!), his trade policies could push producer prices up faster in the months ahead.  Also as usual, even several months worth of data don’t make a meaningful trend.  But to date, the PPI numbers let tariffs off the hook both for wholesale inflation and for the retail inflation it can affect (but doesn’t always, especially if consumer demand remains strong enough, and productivity growth too weak to offset cost pressures).  So anyone trying to puzzle out why American prices keep rising faster than the Federal Reserve’s two percent annual target rate will keep needing to look someplace else.