Prices are about to start rising faster for a lot of products and services. We just got a really clear warning signal that that’s about to happen.
It’s called the producer price index. It’s a monthly report put out by the government, and it measures how much prices are rising at the wholesale level throughout the economy.
These are prices paid by the people and companies that then sell goods and services to the rest of us.
And those wholesale prices went up a lot in July. Overall, they rose multiple times more than economists were expecting, especially in categories that are sensitive to tariffs.
Remember: tariffs are import taxes that companies pay when they bring goods here from other countries. In certain categories, like steel, aluminum, food — especially fresh vegetables and meats — prices went up by a lot. Vegetables: 38 percent in one month.
Often when we see producer prices spike like this, they filter down to consumer prices, because sellers pass on the costs –otherwise it would eat into their profits.
So far, we haven’t seen tariffs impact consumer prices broadly, but that’s probably about to change.
Economists are saying that they expect to see pass-through price increases in the fall, so really within weeks, or maybe a month or two.
I spoke to several economists about this for a story on Marketplace.
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