Producer Prices Up, Signaling Rising Inflation, More BLS Statistician Firings

The numbers aren't great for Trump, so they aren't yet being tinkered with.

‘Her Numbers are RIGGED to make me look bad! OFF WITH HER HEAD! Thank you for your attention to this matter!’

The Bureau of Labor Statistics released its monthly Producer Price Index (PPI) today, showing that the wholesale prices domestic producers get for goods and services were up sharply, by .9 percent. That’s a hell of a lot higher than the Dow Jones forecast of .2 percent, and the biggest monthly increase since June 2022. Hey, that was when inflation was at its highest (9.1 percent) in the post-pandemic period! What a funny coincidence.

While we usually talk about “inflation” in terms of the Consumer Price Index, which measures what people are spending on stuff, the PPI is another important signal of where inflation’s going, since it reflects changes in the costs of production for bidness.

A big jump in the PPI appears to reflect costs of Donald Trump’s tariffs that haven’t (yet) shown up for consumers in the CPI figures released earlier this week. Those were right around where they were predicted, but as Clark Geranen of CalBay Investments ‘splainered to CNBC, that may not last:

“The fact that PPI was stronger-than-expected and CPI has been relatively soft suggests that businesses are eating much of the tariff costs instead of passing them onto the consumer. […] Businesses may soon start to reverse course and start passing these costs to consumers.”

In fact, the economics boffins think that the jump in the PPI is likely to scuttle chances of another Federal Reserve interest rate cut anytime soon, just days after the CPI report had markets assuming a rate cut was definitely on the way. Get ready for Trump to start talking again about firing Fed Chair Jerome Powell for not cutting rates as Trump has ordered him to. (Remember, presidents aren’t supposed to be able to do that, but Generalissimo Trump has other ideas.)

A second CNBC economy boffin-of-the-day, Chris Zaccarelli of Northlight Asset Management, said the new numbers indicate that “inflation is coursing through the economy, even if it hasn’t been felt by consumers yet,” and called it a “most unwelcome surprise” following the CPI report Tuesday.

Now that Trump has installed Heritage Foundation guy Erwin John “EJ” Antoni III as the new head of the Bureau of Labor Statistics, today’s PPI report will no doubt add even more incentive for the new numbers wrangler to follow through on his “plan” to just not release any economic numbers until they can be massaged sufficiently to make Trump look good. Not having data once again appears to be the only thing that Trump learned from the pandemic, since numbers keep getting in the way of what he wants reality to be.

On that theme, do take a few minutes to read Paul Krugman’s latest newsletter, in which Krugman notes that Ben Shapiro had it all wrong: Trump’s feelings don’t care about facts, so he acts based on his feels, which are the best. The jobs numbers don’t show a booming economy, so fire the head of the BLS. Crime is down in DC, but Mad King Donald wants to take over cities, so DC is in a full crisis emergency state of runaway crime that has never before been seen in history!!

Also, Krugman points out this fun nugget about EJ Antoni, which is that he has “actually said that we should define a recession not on the basis of things like employment data or GDP but by how people ‘feel.’” But not the American people, who definitely don’t feel good about the economy according to the polls.

“But we already know that Trump dismisses polls he doesn’t like as fake news. So in practice, I think that Antoni is saying that we should define a recession by how Trump feels. And since he insists we’re in a boom, it’s all good.”

As for the stats showing that crime is down in major cities, including big cities run by Black Democratic mayors, those stats also have to be fake because Trump wants martial law, and that means all the police department reports of crime rates have to be lies, just as Stephen Miller twote the other day (archive link).

Krugman had a good laugh at “the idea that the NYPD is rigging the crime data to make liberal mayors look good.” But the point remains: Fox News and every rightwing white man in America are absolutely certain, with Trump, that just going to get a loaf of bread at the store (a thing he coined “groceries”) in any major city is likely to get you killed, so obviously that is reality.

Krugman speculates, with good reason, that the “next frontier in feelings-over-facts will involve public health,” what with RFK Jr. running HHS and dismantling our ability to prevent and respond to diseases, added to the coming wave of millions of Americans who’ll lose their health coverage so that billionaires can have a big tax cut.

That seems entirely plausible to us, although with hurricane season still likely to be full of surprises, we would also put in a vote for a lot of lies to come regarding death tolls, damage, and the perfection of Trump’s non-response to some major storm that isn’t yet on the radar (or the satellites), and thanks to Trump, may be harder to see coming.

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[CNBC / Paul Krugman]

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