Wholesale prices rose faster than expected in July, says Bureau of Labor Statistics

Wholesale prices rose 0.9% in July, exceeding Wall Street forecasts and potentially hurting President Trump’s push for interest-rate cuts from the Federal Reserve.

The Bureau of Labor Statistics said the Producer Price Index rose 3.3% on an annual basis, the highest 12-month recording since 3.4% in February.

Stocks futures tumbled upon the news. Dow Jones estimates had expected the monthly gain to be closer to 0.2%.

The PPI, which measures prices that producers receive at wholesale before final sale at checkout, is not as closely watched as the Consumer Price Index, which measures prices that everyday consumers see.

However, both measures are factored into an overall price index that the Fed uses to set rates.

Mr. Trump, who campaigned on ending “Bidenflation,” says consumer prices have been relatively stable despite doomsday predictions about his sweeping tariffs, which are a tax on imports.

Chairman Jerome Powell and others at the Fed have been reluctant to cut rates because of the volatile nature of Mr. Trump’s trade agenda.

The White House last week imposed tariffs ranging between 15% and 41% on more than 67 countries, raising levies to their highest levels in over a century. 

Mr. Trump solidified the 10% blanket tariff on all imports and is implementing the 15% rate he negotiated with places like the European Union, Japan and South Korea.

The National Retail Federation and footwear industry lobbies have urged the Trump administration to moderate tariff levels, saying it will be difficult for companies to absorb the tariffs over the long term.

The BLS on Tuesday said core inflation, which excludes volatile food and energy prices, rose 0.3% for the month and 3.1% on a year-over-year basis. It is the first time since February that it grew over 3% on a yearly basis, so some economists and congressional critics saw it as a sign that companies are starting to pass along tariff costs to consumers.

Mr. Trump is undeterred, however, and is considering Fed chair nominees for when Mr. Powell’s term ends in May. He wants people at the Fed who are more likely to cut rates, so U.S. borrowers have better terms.

The president is also considering a lawsuit over the high cost of a renovation project at the Fed building in Washington.