Wholesale prices plunge by most since 2020 despite Trump tariffs

New York Post - May 15th, 2025

US wholesale prices experienced an unexpected decline in April, marking the first drop in more than a year and the largest in five years. The producer price index fell 0.5% from March, with a year-over-year increase decelerating to 2.4%. Core wholesale prices, excluding food and energy, also dipped by 0.4% from March. This surprising development comes amidst President Trump's comprehensive tariffs on imports, which were anticipated to push prices higher. Notably, services prices saw a record decrease of 0.7%, while wholesale food prices fell by 1%, and egg prices plummeted by 39% due to previous bird flu outbreaks. The Labor Department also reported a modest 2.3% rise in consumer prices, the smallest year-over-year gain in over four years.

Economists had predicted that Trump's tariffs would lead to increased prices, expecting the effects to manifest by June or July. However, the recent de-escalation of the US-China trade war, with significant reductions in tariffs from both sides, adds complexity to these forecasts. Trump's adjustments to tariffs, such as reducing taxes on Chinese imports from 145% to 30% and China's reciprocal cuts, make it challenging to predict the tariffs' long-term impact on the economy. Analysts like Sal Guatieri from BMO Capital Markets believe that tariffs have yet to significantly affect pricing but anticipate changes in the near future as the situation evolves.

Economy Tariffs Labor Department President Trump Us China Trade War Us Wholesale Prices Producer Price Index

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RATING

6.8

Fair Story

Consider it well-founded

The article provides a largely accurate and timely report on the unexpected drop in US wholesale prices, supported by credible data from the US Labor Department. It presents a balanced view of the economic situation, though it could benefit from more diverse perspectives and expert opinions. The article is clear and accessible, effectively communicating complex economic data to a general audience. While it addresses topics of public interest and has the potential to influence discussions on trade policies and inflation, its engagement and impact may be limited by its focus on economic data. Overall, the article offers a solid analysis of current economic trends, though it could improve in areas such as source quality and transparency.

Accuracy

The story is largely accurate in its reporting of the unexpected drop in US wholesale prices and the details surrounding producer prices. It correctly cites the 0.5% drop in the producer price index (PPI) and the 2.4% year-over-year increase, as reported by the Labor Department. The article also accurately describes the decline in core wholesale prices excluding food and energy. However, the claim about Trump's tariffs and their expected impact on prices could have been more thoroughly supported with specific examples or expert opinions. The mention of a massive de-escalation of tariffs with China is accurate but lacks context about the broader economic implications.

Balance

The article presents a balanced view of the economic situation, noting both the unexpected drop in wholesale prices and the potential future impact of tariffs. It includes perspectives from economists predicting future price increases due to tariffs, which adds depth to the analysis. However, the piece could benefit from including more diverse viewpoints, such as opinions from different economists or industry experts, to provide a more comprehensive understanding of the situation.

Clarity

The article is generally clear and well-structured, with a logical flow of information. It effectively communicates complex economic data in an accessible manner, making it understandable for a general audience. The language is neutral and straightforward, though some readers may benefit from additional context or explanations of economic terms.

Source quality

The article relies on data from the US Labor Department, which is a credible and authoritative source for economic statistics. However, it lacks direct attribution to economists or industry experts, reducing the overall reliability of the analysis. The inclusion of a quote from Sal Guatieri, a senior economist at BMO Capital Markets, adds some credibility, but more expert opinions could strengthen the article's authority.

Transparency

The article provides some context for the economic data it presents, such as the mention of tariffs and their potential impact on prices. However, it lacks transparency regarding the methodology behind the economic forecasts and the selection of data points. The article could improve by disclosing more about the sources of its economic predictions and the context in which they were made.