Washington (AP) – The wholesale prices of the United States have dropped unexpectedly in April for the first time in more than a year despite President Donald Trump’s radical taxes on imports.
The producer prices index – which follows inflation before hitting consumers – dropped 0.5% last month from March, the first decline since October 2023 and the largest in five years. Compared to a year earlier, producers’ prices increased by 2.4% last month, decelerating from a gain of 3.4% from one year to the next in March, the US Labor Department reported on Thursday.
Excluding volatile prices for food and energy, basic basic prices fell 0.4% compared to March and increased by 3.1% compared to the previous year.
Economists had planned that producers’ prices move modestly in April.
The prices of the services dropped by 0.7%, the greatest drop in government files dating back to 2009, on the reduction of beneficiary margins among wholesalers and retailers. The prices of wholesale foods dropped by 1%, and the prices of eggs plunged 39%, although they still increase almost 45%compared to a year ago due to the bird flu.
On Tuesday, the Labor Department indicated that consumer prices increased by 2.3% last month from April 2024 – the smallest gain from one year to the next in more than four years.
Economists have predicted that Trump prices would increase prices, and many expect the impact to appear in June or July.
However, Trump’s prices are constantly evolving, so it is difficult to predict their economic impact. Monday, for example, Trump unexpectedly accepted a massive de -escalation of his trade war with China – the third greatest source of American imports – by reducing its taxes on Chinese products to 30% by 145%; China has reduced its reprisals on American products from 125% to 10%.
“The prices have not yet made a mark on prices, although it is probably only a matter of time,” wrote Sal Guatieri, main economist at BMO Capital Markets, in a comment.
