The Producer Price Index fell unexpectedly last month, defying economists’ expectations that President Donald Trump’s tariff policy would increase costs.
The PPI is a measure of the average change in prices for U.S. producers of goods and services, according to the Bureau of Labor Statistics.
The Wall Street Journal reported Thursday that, based on a poll of economists it conducted, they expected the overall index to rise by 0.3 percent in April.
But prices dropped by a seasonally adjusted 0.5 percent during the month instead.
That change marked “the largest decline since the index began in December 2009. Over two-thirds of the broad-based decrease can be traced to margins for final demand trade services, which dropped 1.6 percent,” the BLS said.
In the previous 12 months through April — covering primarily President Joe Biden’s administration — the overall PPI increased by 2.4 percent, the Journal noted.
The decline in the PPI came on the heels of the BLS reporting earlier this week that the Consumer Price Index rose just 0.2 percent, after falling 0.1 percent in March.
Over the past year, the CPI increased by 2.3 percent.
Who deserves more credit for the improving U.S. economy – Trump or Biden?
CNBC reported the current annual rate is the lowest since February of 2021, prior to the passage of the $1.9 trillion American Rescue Plan by the Democratic Congress, which Biden signed into law.
Inflation rapidly shot up afterward, spiking in June 2022 at 9.1 percent.
Who’s responsible for the inflation bomb?
Trump: 1.6%
Biden after the $1.9T American Rescue Plan: 9.1%The spending bomb was supposed to create an ‘equitable recovery,’ but instead, Bidenflation hit the poor and middle class the hardest. pic.twitter.com/ee0SWCeovG
— Stephen Moore (@StephenMoore) February 10, 2024
Last month, Senate Minority Leader Chuck Schumer called Trump’s tariffs “one of the most disastrous and poorly thought-out policies” of the new administration. He further predicted they would cost American families on average $5,000 per year.
In April, Chuck Schumer warned tariffs would be a “disaster” and cost American families $5,000.
Reality:
– Inflation fell to a 4-year low
– Gas prices fell for the 3rd month in a row
– Airfare, energy, and hotel prices are down
– Grocery prices had biggest decline in 5 years… pic.twitter.com/YGYEc5S8Z9— Christian Collins (@CollinsforTX) May 14, 2025
However, Axios headlined, “Hard data suggests tariff-driven inflation and recession fears may be overblown.”
“New data out Thursday showed steady retail sales and a surprising drop in wholesale prices in April,” the outlet said.
It offered the caveat that Walmart, the nation’s largest retailer, said it will have to raise prices over time if the new tariffs continue.
Trump paused his reciprocal tariffs on April 10 for 90 days, but kept in place a universal 10 percent rate, except for China, while his administration conducts trade negotiations.
On Monday, the White House announced a deal with China that also paused reciprocal tariffs in favor of a 10 percent rate for 90 days during trade talks.
Trump has also kept a 20 percent fentanyl-related tariff in place from earlier in the year, seeking to pressure Beijing to crack down on its exports to the U.S.
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