WASHINGTON: U.S. wholesale prices dropped unexpectedly in April for the first time in more than a year despite President Donald Trump’s sweeping taxes on imports.
The producer price index — which tracks inflation before it hits consumers — fell 0.5% last month from March, the first drop since October 2023 and the biggest in five years. Compared to a year earlier, producer prices rose 2.4% last month, decelerating from a 3.4% year-over-year gain in March, the U.S. Labor Department reported Thursday.
Excluding volatile food and energy prices, so-called core wholesale prices dipped 0.4% from March and rose 3.1% from a year earlier.
Economists had forecast that producer prices rose modestly in April.
Services prices fell 0.7%, the biggest drop in government records going back to 2009, on shrinking profit margins at wholesalers and retailers. Wholesale food prices fell 1%, and egg prices plunged 39%, though they are still up nearly 45% from a year ago because of bird flu.
On Tuesday, the Labor Department reported that consumer prices rose just 2.3% last month from April 2024 — smallest year-over-year gain in more than four years.
Economists have predicted that Trump’s tariffs would drive up prices, and many expect the impact to show up in June or July.
