{"id":13889,"date":"2025-08-21T19:19:18","date_gmt":"2025-08-21T19:19:18","guid":{"rendered":"https:\/\/zacksim.com\/blog\/?p=13889"},"modified":"2025-08-21T19:19:18","modified_gmt":"2025-08-21T19:19:18","slug":"wholesale-inflation-jumps-how-will-consumers-be-affected","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/wholesale-inflation-jumps-how-will-consumers-be-affected\/","title":{"rendered":"Wholesale Inflation Jumps\u2014How Will Consumers Be Affected?"},"content":{"rendered":"\n<p>Mark P. from Fort Worth, TX asks: <em>Hi Mitch, I saw that wholesale inflation jumped in July, supposedly the biggest increase in three years. I feel like the news is all over the place on this issue. Some say there\u2019s little inflationary impact; others say that companies are starting to pass those costs on. What\u2019s your take, and do you think this changes what the Fed may do?<\/em><\/p>\n\n\n\n<p><strong>Mitch\u2019s Response:<\/strong><\/p>\n\n\n\n<p>You\u2019re right. The July Producer Price Index (PPI) did show a sharp acceleration, up 0.9% from the prior month and 3.3% year-over-year. This marked the biggest monthly gain in three years, led by a 2% jump in margins at wholesalers and retailers. Some observers have linked these price increases to tariffs, noting that businesses may be raising prices rather than fully absorbing higher import costs.<\/p>\n\n\n\n<p>I think we\u2019re still in wait-and-see mode when it comes to gauging the pass-through effects of tariffs to consumer prices. As seen on the chart below, a significant portion of the price pressure came from services, which to date are not affected by import tariffs. Services inflation is a concern on its own, to be sure, but the link to tariffs may not be as straightforward.<\/p>\n\n\n\n<p><strong><u><sup><a href=\"https:\/\/go.steadyinvestor.com\/arrow-inflation-guide?source=zim&amp;medium=blog&amp;term=mitchsmailbox_inflation_guide_zim_08_21_2025&amp;content=inflation_guide\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/arrow-inflation-guide?source=zim&amp;medium=blog&amp;term=mitchsmailbox_inflation_guide_zim_08_21_2025&amp;content=inflation_guide\">Don\u2019t Let Rising Prices Shrink Your Retirement Savings<\/a><\/sup><\/u><\/strong><\/p>\n\n\n\n<p>Inflation is steadily eroding the money you\u2019ve worked a lifetime to build. July\u2019s spike is a clear reminder of how quickly rising costs can undermine your plan.<\/p>\n\n\n\n<p>That\u2019s why I\u2019ve created our free guide, <strong><em><u><a href=\"https:\/\/go.steadyinvestor.com\/arrow-inflation-guide?source=zim&amp;medium=blog&amp;term=mitchsmailbox_inflation_guide_zim_08_21_2025&amp;content=inflation_guide\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/arrow-inflation-guide?source=zim&amp;medium=blog&amp;term=mitchsmailbox_inflation_guide_zim_08_21_2025&amp;content=inflation_guide\">4 Ways to Protect Your Retirement from Rising Inflation<sup>1<\/sup><\/a><\/u><\/em><\/strong>. This free guide provides simple, proven strategies to help keep your retirement on track, no matter what happens with the Fed or the economy. Inside, you\u2019ll discover:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Asset allocations that outperform inflation<\/li>\n\n\n\n<li>Spending categories where prices are rising the most<\/li>\n\n\n\n<li>Getting the most from Social Security benefits<\/li>\n\n\n\n<li>Plus, many more ideas to protect yourself and your assets against inflation<\/li>\n<\/ul>\n\n\n\n<p>If you have $500,000 or more to invest, get your free guide today! Download <strong><a href=\"https:\/\/go.steadyinvestor.com\/arrow-inflation-guide?source=zim&amp;medium=blog&amp;term=mitchsmailbox_inflation_guide_zim_08_21_2025&amp;content=inflation_guide\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/arrow-inflation-guide?source=zim&amp;medium=blog&amp;term=mitchsmailbox_inflation_guide_zim_08_21_2025&amp;content=inflation_guide\"><em><u>4 Ways to Protect Your Retirement from Rising Inflation<sup>1<\/sup><\/u><\/em><\/a><\/strong><em><a href=\"https:\/\/go.steadyinvestor.com\/arrow-inflation-guide?source=zim&amp;medium=blog&amp;term=mitchsmailbox_inflation_guide_zim_08_21_2025&amp;content=inflation_guide\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/arrow-inflation-guide?source=zim&amp;medium=blog&amp;term=mitchsmailbox_inflation_guide_zim_08_21_2025&amp;content=inflation_guide\">.<\/a><\/em><\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"707\" height=\"586\" src=\"https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2025\/08\/image-5.png\" alt=\"\" class=\"wp-image-13891\" srcset=\"https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2025\/08\/image-5.png 707w, https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2025\/08\/image-5-300x249.png 300w\" sizes=\"auto, (max-width: 707px) 100vw, 707px\" \/><figcaption class=\"wp-element-caption\"><strong><em>Source: U.S. Bureau of Labor Statistics<sup>2<\/sup><\/em><\/strong><\/figcaption><\/figure>\n\n\n\n<p>From what I\u2019m seeing today, companies appear, so far, to be absorbing at least part of the tariff burden themselves. Margins have compressed in certain areas, which is neither surprising nor alarming. Businesses often balance between price increases and profit pressures in response to higher costs. In July, for example, a big portion of the services price increase came from portfolio management fees, which are tied to stock market movements, not tariffs.<\/p>\n\n\n\n<p>There is some debate on whether producer prices are leading indicators for consumer prices. I tend to think they are, which means August and September data will be very telling for how the tariff\/inflation story is playing out. I would expect to see some upward pressure on consumer prices in the fall, which, as you mention in your question, could impact the Fed\u2019s thinking.<\/p>\n\n\n\n<p>Fed officials do acknowledge tariffs can put upward pressure on inflation, and they\u2019re likely to see any upward pressure on CPI as directly related to import duties. But they\u2019re also balancing that against a cooling labor market and slower demand in the first half of the year. When you put all the economic data together, I think the Fed has a window to lower borrowing costs at its next meeting, but just by 25 basis points. Suggestions that the cuts may be bigger are overly optimistic, in my view.<\/p>\n\n\n\n<p>From here, businesses will likely continue to juggle whether to pass along tariff costs or absorb them. We need more data to know for sure. In terms of the July PPI print, some of the volatility had little to do with tariffs at all. It doesn\u2019t strike me as the start of a new, sustained inflation surge, but it does give the Fed some cover not to be overly aggressive with rate cuts.<\/p>\n\n\n\n<p>For long-term investors, moments like this are a chance to step back and make thoughtful adjustments, not to panic.<\/p>\n\n\n\n<p>To help you navigate rising prices and protect your retirement, we\u2019ve created a free guide, <a href=\"https:\/\/go.steadyinvestor.com\/arrow-inflation-guide?source=zim&amp;medium=blog&amp;term=mitchsmailbox_inflation_guide_zim_08_21_2025&amp;content=inflation_guide\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/arrow-inflation-guide?source=zim&amp;medium=blog&amp;term=mitchsmailbox_inflation_guide_zim_08_21_2025&amp;content=inflation_guide\"><strong><em><u>4 Ways to Protect Your Retirement from Rising Inflation<sup>3<\/sup><\/u><\/em><\/strong>.<\/a> It provides practical strategies to manage inflation pressures, safeguard your income, and keep your plan on track in today\u2019s market.<\/p>\n\n\n\n<p>Inside, you\u2019ll learn about key inflation-related topics, including:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Asset allocations that outperform inflation<\/li>\n\n\n\n<li>Spending categories where prices are rising the most<\/li>\n\n\n\n<li>Getting the most from Social Security benefits<\/li>\n\n\n\n<li>Plus, many more ideas to protect yourself and your assets against inflation<\/li>\n<\/ul>\n\n\n\n<p>If you have $500,000 or more to invest, get your free guide today! Download <strong><a href=\"https:\/\/go.steadyinvestor.com\/arrow-inflation-guide?source=zim&amp;medium=blog&amp;term=mitchsmailbox_inflation_guide_zim_08_21_2025&amp;content=inflation_guide\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/arrow-inflation-guide?source=zim&amp;medium=blog&amp;term=mitchsmailbox_inflation_guide_zim_08_21_2025&amp;content=inflation_guide\"><em><u>4 Ways to Protect Your Retirement from Rising Inflation<sup>3<\/sup><\/u><\/em><\/a><\/strong><em><a href=\"https:\/\/go.steadyinvestor.com\/arrow-inflation-guide?source=zim&amp;medium=blog&amp;term=mitchsmailbox_inflation_guide_zim_08_21_2025&amp;content=inflation_guide\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/arrow-inflation-guide?source=zim&amp;medium=blog&amp;term=mitchsmailbox_inflation_guide_zim_08_21_2025&amp;content=inflation_guide\">.<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The July Producer Price Index (PPI) had its biggest year-over-year rise in three years. How much of that will be passed on, and will the Fed take action? <\/p>\n","protected":false},"author":3,"featured_media":13575,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[66,71],"tags":[],"class_list":["post-13889","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mitchs-mailbox","category-private-client-group"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/13889","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=13889"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/13889\/revisions"}],"predecessor-version":[{"id":13892,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/13889\/revisions\/13892"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media\/13575"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=13889"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=13889"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=13889"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}