Wholesale Inflation Surprise

August 19, 2025 

The Producer Price Index (PPI) in July was an upside surprise. The index increased 0.9%, the largest monthly uptick since June 2022, surpassing the estimate of many analysts. Considered a leading economic indicator, PPI is reported by the Bureau of Labor Statistics (BLS). On an annual basis, PPI increased by 3.3% which is above the Federal Reserve 2% inflation target. At 3.3% the index casts doubt on a September interest rate cut. The July mark is the first measure since BLS adjusted its PPI methodology by removing more than 300 categories from the inputs. The August PPI will be released on September 10.

The PPI sample includes more than16,000 establishments providing 64,000 price quotations per month. Establishments are selected for the PPI survey via systematic sampling and participation is voluntary.