President Donald Trump claimed victory over inflation after wholesale prices unexpectedly fell in August, defying economists’ predictions and showing minimal impact from his administration’s tariff policies.
The Producer Price Index dropped to 2.6% year-over-year, far below the 3.3% analysts expected, according to White House Press Secretary Karoline Leavitt in a press release.
The data provides ammunition for Trump’s economic agenda, as critics warned his tariffs would spike consumer costs. Instead, August saw wholesale prices decline month-over-month while energy goods and trade services fell.
“The latest PPI report shows there is no inflation — wholesale prices fell and smashed economists’ expectations,” Leavitt said. “President Trump has defeated Joe Biden’s inflation crisis while successfully implementing powerful tariffs, which haven’t hiked prices like the so-called ‘experts’ claimed.”
Market analysts expressed surprise at the positive numbers. CNBC’s Rick Santelli called it “real progress,” noting the 2.6% figure came in well under expectations.
“This is FANTASTIC NEWS. Producer prices MUCH LOWER than we thought…” said Bullseye Investment Group’s Adam Johnson.
The Trump administration seized the moment to pressure Federal Reserve Chairman Jerome Powell. Leavitt dubbed him “Jerome ‘Too Late’ Powell” and demanded immediate rate cuts.
Mohamed El-Erian, Allianz’s chief economic advisor, suggested the Fed should consider a 50-basis-point cut. “What we’re learning is that the final impact on the consumer is much less than people expected,” he said.
Small business optimism also rose in August to its highest level since January. The combined economic indicators give Trump fresh talking points against critics of his trade policies.
Fox Business Network’s Cheryl Casone noted the absence of expected tariff impacts: “That tariff [price] impact… not seeing it — and here we go with a very positive and good inflation report coming out.”