US Wholesale Prices See Largest Drop Since 2020

U.S. wholesale prices fell by 0.5% in April, marking the largest monthly decline since April 2020, with the Producer Price Index (PPI) dropping unexpectedly. The decline was mainly driven by shrinking profit margins for wholesalers and retailers, especially in machinery, vehicles, and trade services. On an annual basis, PPI inflation slowed to 2.4%, and core PPI, excluding food and energy, also declined. The decrease in wholesale prices coincided with the smallest annual increase in the Consumer Price Index in over four years. Despite expectations that tariffs would raise prices, companies have mostly absorbed the added costs so far. However, analysts warn that President Trump's tariffs could still contribute to higher inflation in the coming months.