US producer inflation heats up as goods, services prices soar [View all]

Source: Reuters

eased by the most in three years in July amid a surge in the costs of goods and services, suggesting a broad pickup in inflation was imminent, posing a dilemma for the Federal Reserve.

The stronger-than-expected producer inflation report from the Labor Department on Thursday followed data this week showing consumers paid higher prices for services like dental care and airline fares last month. There were also no signs of further labor market deterioration in early August.

Economists had hoped that moderate services price gains would blunt the inflationary impact of higher goods prices from President Donald Trump's sweeping import tariffs.

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"This is a kick in the teeth for anyone who thought that tariffs would not impact domestic prices in the United States economy," said Carl Weinberg, chief economist at High Frequency Economics. "This report is a strong validation of the Fed's wait-and-see stance on policy changes."

Read more: https://www.reuters.com/world/us/us-producer-inflation-heats-up-goods-services-prices-soar-2025-08-14/