(NEW YORK) -- Wholesale prices unexpectedly dropped in August, clocking in lower than economists expected and defying concerns about a tariff-induced spike in costs suffered by suppliers.
Producer prices fell 0.1% in August, rolling back some of a sharp increase in wholesale prices that took hold in the previous month, the U.S. Bureau of Labor Statistics said on Wednesday.
Since President Donald Trump began escalating tariffs earlier this year, the monthly wholesale-price measure has drawn close attention as an indicator of a potential pass through to consumer prices.
The fresh data arrives at a challenging time for the nation's economy. In recent months, inflation has picked up while hiring has slowed, posing a risk of an economic double-whammy known as "stagflation."
Fed Chair Jerome Powell recently hinted at the possibility of an interest rate cut, appearing to indicate greater concern for flagging employment growth than for rising prices. Investors widely expect a quarter-point interest rate cut when Fed policymakers meet later this month.
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