US producer inflation unexpectedly fell in April due largely to a sharp drop in services costs, according to government data published Thursday, as President Donald Trump’s “liberation day” tariffs took effect.
This was significantly below the Briefing.com’s market consensus, which expected a 0.3 percent rise in prices from March.
“The April decline in the index for final demand is attributable to prices for final demand services, which decreased 0.7 percent,” the Labor Department said.
“Over two-thirds of the broad-based decrease can be traced to margins for final demand trade services, which dropped 1.6 percent,” it added. This measure looks at changes to the margins received by wholesalers and retailers.
The Labor Department said there had been no change on the overall goods side of the equation, despite Trump’s April 2 announcement to sharply raise tariffs on most countries.
However, final demand excluding the more volatile food, energy, and trade services fell last month for the first time since April 2020 — as the Covid-19 pandemic was sweeping across the country.
In the 12 months through April, the PPI index rose 2.4 percent.
