Earlier today, when analyzing the latest PPI data, we concluded that - at least so far - it is companies that are eating tariffs costs, not passing them on to consumers. In a subsequent report, Bloomberg agrees. 

Echoing what we said, Bloomberg writes that the details from the PPI report were less benign than the headline number suggests, as "core goods were the main source of price pressures in May, suggesting that companies may be eating some of the added costs from tariffs."

The increase is particularly visible in finished goods, and specifically durable consumer goods. This category just posted its largest increase since 2023.

But while that is bad news for companies, it is good news for consumers. As Bloomberg further explains, the fact that core goods continue to be a source of disinflation in consumer prices but a source of persistent inflation in producer prices hints at pressure on corporate margins. That can also be gleaned simply from the fact that PPI is running higher than CPI, just as we highlighted earlier.

It certainly should explain "why stocks aren’t over the moon with this report", even if it is good news for consumers as it means that, so far, it is corporations (with the benefits of Chinese suppliers) who are footing the cost of Trump's trade war.