US producer prices fall for 1st time since April
For the first time since April, US producer prices slipped by 0.1% in August. This drop came mostly from cheaper energy and trade services.
On a yearly basis, wholesale inflation cooled to 2.6%, hinting that some price pressures are easing.
Interest rate cuts might be on the table
With inflation showing signs of slowing, there's growing talk that the Federal Reserve might cut interest rates at its September meeting—possibly by 0.25%.
President Trump has been openly calling for immediate cuts, while Fed Chair Jerome Powell has taken a more cautious approach.
Still, "core" producer prices (excluding food, energy, and trade) actually jumped 2.8% over the year—the biggest rise since March—so not all inflation worries are gone.
What do economists think?
The Labor Department says falling trade margins and service costs drove this PPI drop.
Economists think this could mean less short-term inflation risk ahead of tomorrow's consumer price index report (out September 11), which will give everyone a clearer sense of where US prices are headed next.