How are tariffs affecting pricing or sourcing in your industry?

June PPI: A Tale of Two Economies
The latest Producer Price Index (PPI) report from the Bureau of Labor Statistics shows a clear divergence: while overall prices remained flat in June (0.0% MoM), the details tell a more nuanced story. Goods prices rose +0.3%, while services prices declined –0.1%, a reflection of America’s dual-track inflation story.

Tariffs Are Quietly Lifting Goods Prices
A 0.8% spike in communication equipment and rising costs in appliances, furniture, and electronics point to a growing theme: tariff-driven price pressure. For example, appliance manufacturers, hit by a 50% levy on steel and aluminum, are now passing rising input costs through the supply chain, pushing prices higher.

 Services Inflation? Not So Much
As a service-based economy, the U.S. benefits from softer price movements in this sector. With services making up nearly 70% of GDP, the –0.1% decline in June’s services PPI offers some reassurance that core inflation remains under control for now.

The Bottom Line:

• Goods inflation is rising, and tariffs are a key contributor.
• Services inflation is subdued, helping keep broader inflation in check.
• Tariffs are inflationary, even if selectively, and they’re reshaping cost structures across multiple industries.

As the data shows, the inflation battle is far from over; it’s just shifting.

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