Following the 'mixed' message from CPI earlier in the week (which the market perceived as dovishly cooler than expected), Producer Price Inflation was expected to accelerate in July's data released today.

...and accelerate it did - dramatically with headline PPI rising 0.9% MoM (massively more than the +0.2% expected and the biggest jump since June 2022) sending PPI up 3.3% YoY (highest since Feb 2025)...

Source: Bloomberg

The surge in producer prices was driven almost entirely by Services (how is that tariff related?)

Source: Bloomberg

Core PPI also jumped 0.9% MoM (dramatically hotter than expected) with the YoY shift spiking to +3.7%...

Source: Bloomberg

Looking at the PPI detail matters for PCE calculation:

• Airline passenger services rose 1% m/m in July after contracting 2.3% in June.
• Portfolio management costs rose 5.8% m/m in July, after rising 2.1% in June.
• Home health and hospice care slowed to 0.1% m/m after rising 0.2% m/n in June.
• Hospital outpatient care contracted 0.5% m/m after rising 0.9% m/m in June.

PPI Energy prices are accelerating, tracking the oil price jump...

Source: Bloomberg

Over half of the increase is attributable to margins for final demand trade services, which jumped 2.0% with margin pressure roaring back...

Source: Bloomberg

Will Trump fire the new BLS chief?

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