‘Real Progress Here’: Wholesale Inflation Drops In August, Stunning Economists

Wholesale prices dropped in August, coming in significantly below what economists had expected, and led to a new record high for the S&P 500 on Wednesday.

The Bureau of Labor Statistics reported that the Producer Price Index (PPI) came in at 2.6% year-over-year, far below the 3.3% rise that was forecasted, according to Barron’s. Wholesale prices dropped 0.1% on a monthly basis, which was also better than what economists were expecting, with the Dow Jones predicting a 0.3% rise, CNBC reported.

“Boy, I’m surprised — real progress here! 2.6% on year-over-year headline. We were expecting 3.3%!” said CNBC’s Rick Santelli.

CNBC host Becky Quick added that the inflation report was “a real shocker.”

The White House took a victory lap after the report from the Bureau of Labor Statistics, blasting “the so-called ‘experts’” who had predicted for months that President Donald Trump’s wide-ranging tariffs would cause prices to skyrocket.

“The latest PPI report shows there is no inflation — wholesale prices fell and smashed economists’ expectations. President Trump has defeated Joe Biden’s inflation crisis while successfully implementing powerful tariffs, which haven’t hiked prices like the so-called ‘experts’ claimed,” said White House Press Secretary Karoline Leavitt. “This is yet another reason for Jerome ‘Too Late’ Powell to cut the rates immediately to make everyday life more affordable for Americans.”

In July, the PPI increased by 0.7%, which was the highest month-over-month increase since Trump took office for his second term in January.

The S&P 500 surged to a new record high, climbing another 0.4% after the report came out on Wednesday, according to CNBC. Computer software company Oracle led the S&P 500 rally, gaining 40% after the company released a surprising forecast, stating that it expects AI-fueled revenue to reach $144 billion by its 2030 fiscal year.

The August inflation report was published just one week before the Federal Reserve Board of Governors meets for its September gathering, as signs indicate that policymakers may lower interest rates after months of pressure from Trump. Fed Chair Jerome Powell hinted last month that a rate cut could happen under current economic conditions.

Prices under Trump’s tariffs have continued to defy predictions from economists as American consumers have seen little to no effect on overall prices after the president imposed duties on dozens of countries, including America’s top trading partners. The tariffs, however, will be considered by the Supreme Court, as the administration warns that a ruling striking down the tariffs would have “ruinous” consequences for the U.S. economy.