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Jun 20, 2025  |  
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Zachary Halaschak, Economics Reporter


NextImg:Inflation rises to 0.8% in July in producer price index

Inflation, as measured by the producer price index, ticked up to 0.8% for the year ending in July, a month after nearly flatlining.

The new numbers were released on Friday by the Bureau of Economic Analysis. Most economists had expected there to be an increase after annual wholesale inflation clocked in at an ultra-low 1% in June.

The increase is one indication that some of the country’s inflationary pressures are still holding up to some degree against the Federal Reserve’s campaign to slow economywide spending by hiking interest rates.

On a month-to-month basis, the wholesale price index increased by 0.3%.

INFLATION TICKED UP TO 3.2% IN JULY IN SETBACK FOR BIDEN AND FED

Friday morning’s report came a day after the consumer price index data for July showed overall annual inflation rose slightly to a 3.2% rate for the year ending in July, the first increase after a full straight year of declines.

Too-high inflation has hurt households over the past two years and undercut support for President Joe Biden’s economic agenda, a dynamic that has borne out in polling that consistently shows Biden getting low marks on his handling of the economy.

Republicans have used the higher prices as a cudgel to admonish Biden and Democrats and have blamed large spending bills, like Biden’s pricey pandemic relief legislation, as major drivers of inflation.

But as inflation has generally trended down over the past year, Biden and the White House have sought to rebrand the president’s economic agenda as a success, touting bright spots in the economy like the strong labor market and positive gross domestic product growth as “Bidenomics” in action.

Overall, the country’s inflation trendline has shown cooling in response to the Fed’s 17 months of tightening. The Fed has raised rates by a large degree since last March, with the target rate now 5.25% to 5.50%.

Many economists, given some indications of a slowing labor market and the declines in inflation, expect that the Fed’s quarter-of-a-percentage-point hike last month will be the last of this year.

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With the declines in inflation and with the labor market remaining above water (though showing some recent signs of weakening) more economists are starting to predict that the U.S. could sidestep a recession even despite the barrage of rate hikes by the central bank.

There is an increased likelihood of a so-called “soft landing,” which is a scenario in which the Fed is able to successfully tame inflation without a substantial economic downturn — something that even just months ago seemed highly unlikely but now appears within reach.