Surprising Decline in US Wholesale Prices
On Wednesday, CNBC editor Rick Santelli expressed his surprise over a recent drop in US wholesale prices. The Producer Price Index (PPI) revealed a 0.1% decrease in prices that producers pay, bringing the annual rate down to 2.6%, according to the Bureau of Labor Statistics (BLS). Santelli noted during his segment on “Scoobox” that this was the first instance of negative change since April and indicated “real progress.”
Santelli had initially expected a rise of 0.3% in August but was taken aback by the actual decline. “Last month, we saw an increase of 0.9% in both measures,” he remarked, reflecting on the unexpected data.
He further examined core measures excluding food and energy, which were also lower than expected, sitting at 2.8%. This represented the smallest increase since June, echoing back to even lower numbers from April 2024.
On August 29, CNN reporters Erica Hill and Matt Egan discussed declining gas prices during President Donald Trump’s tenure. Egan noted that Gasbuddy projected a national average of $3.15 per gallon for Labor Day, the lowest since 2020, a time when road traffic was severely affected by COVID-19.
He reflected on how gas prices had fluctuated over the past years, stating that prices were expected to be lower than last year and significantly less than the nearly $4 per gallon seen three years prior. Under the Biden administration, national average gas prices had spiked dramatically, approaching $5 in June 2022.
Trump announced plans to eliminate tariffs significantly, which many economists feared would lead to increased inflation and other economic issues. However, the markets currently anticipate an 88% chance that there won’t be a quarter-point interest rate cut at the upcoming Federal Open Market Committee meeting on September 17, based on data from the CME Group’s FedWatch tool.
Job growth had also slowed down in July and August, and the BLS is set to release the Consumer Price Index (CPI) data soon, which adds another layer of interest to the evolving economic picture.
