Unusually, we get a look at August's Producer Prices (today) ahead of the Consumer Prices (tomorrow) with analysts expecting a 0.3% MoM increase (considerably less than the large 0.9% MoM surge in July).

As a reminder, PPI and CPI (reporting next two days) are also under the BLS umbrella

— zerohedge (@zerohedge) September 9, 2025

However, amid all the Trump Tariff tantrums, the headline PPI print FELL 0.1% MoM (yes, deflation) and July was revised down to +0.7% MoM, smashing PPI YoY down to +2.6% (3.3% YoY exp)...

Source: Bloomberg

A big reversal from last month is Final Demand Trade Services, with prices tumbling MoM...

Source: Bloomberg

Final demand services: The index for final demand services fell 0.2 percent in August, the largest decline since moving down 0.3 percent in April. The August decrease can be traced to a 1.7-percent drop in margins for final demand trade services. (Trade indexes measure changes in margins received by wholesalers and retailers.) Conversely, the indexes for final demand services less trade, transportation, and warehousing and for final demand transportation and warehousing services increased, 0.3 percent and 0.9 percent, respectively.

Product detail: Three quarters of the August decrease in prices for final demand services can be attributed to a 3.9-percent decline in margins for machinery and vehicle wholesaling. The indexes for professional and commercial equipment wholesaling, chemicals and allied products wholesaling, furniture retailing, food and alcohol retailing, and data processing and related services also moved lower. In contrast, prices for portfolio management advanced 2.0 percent. The indexes for truck transportation of freight and for apparel wholesaling also increased.

Final demand goods: Prices for final demand goods inched up 0.1 percent in August, the fourth consecutive advance. Leading the August increase in the index for final demand goods, prices for final demand goods less foods and energy rose 0.3 percent. The index for final demand foods moved up 0.1 percent. Conversely, prices for final demand energy declined 0.4 percent.

Product detail: A major factor in the August increase in the index for final demand goods was a 2.3-percent advance in prices for tobacco products. The indexes for beef and veal; processed poultry; printed circuit assemblies, boards, modules and modems; and electric power also rose. In contrast, prices for utility natural gas decreased 1.8 percent. The indexes for fresh and dry vegetables, chicken eggs, and copper base scrap also fell.

Producer Prices ex food and energy also fell 0.1% MoM with pries rising 2.8% YoY (well below expectations)

Source: Bloomberg

Under the hood, energy prices fell as did Trade Services...

We warned that Energy PPI would fall (and has further to fall)...

Source: Bloomberg

Finally, Goods ex food and energy (perhaps the most closely tied to tariffs) rose 0.3% MoM (slower than in July)

Source: Bloomberg

There is some pressure coming down the pipeline though as Intermediate demand prices are rising...

Source: Bloomberg

Economists also pay close attention to the PPI report because some of its components are used to calculate the Fed’s preferred measure of inflation, the personal consumption expenditures price index.

Those measures were mixed in August: Portfolio management services and airfares continued to rise at a solid pace, while various measures of health care services were more tame.

Over to you Mr. Powell!

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