Business EconomyPosted at: Jul 17 2025 7:49AM


Latest US inflation report shows pullback in travel spending, increase in cost of goods

New York, July 17 (UNI) The muted US wholesale inflation in June has presented a better-than-expected outcome amidst President Donald Trump’s hefty tariffs on global trading partners.
However, a steep drop-off in travel and other services masked an increase in the cost of goods.
The Producer Price Index, which measures the average change in prices paid to producers, was unchanged from May, and the annual rate of wholesale-level inflation slowed 2.3 percent, staying lower in part because of base effects (as the year-ago period experienced higher inflation), reports CNN.
Economists had expected that prices would rise 0.2 percent on a monthly basis and 2.5 percent annually, according to FactSet.
A report from the Bureau of Labor Statistics showed yesterday that prices have relatively cooled down for producers as compared to in May.
Core PPI, which excludes the volatile components of food and energy, also held flat from May.
The report comes on the heels of a more concerning monthly inflation report, the Consumer Price Index, which showed that prices moved higher in June, lifted in part by more expensive goods in tariff-sensitive industries.
It creates a complicated picture of the US economy as Trump’s trade war unfolds, forcing businesses, consumers and the central bank to scramble to manage the impact.
The overall index was distorted by a 2.7 percent drop in airline passenger services, a likely consequence of international travellers pulling back on their visits to the United States, Joe Brusuelas, chief economist at RSM US, said.
Travel accommodation services prices (hotels and motels) sank 4.1 percent.
Although gas prices went up in June, falling services prices — particularly at hotels, airlines and car dealerships — drove the overall index lower.
Travel and leisure prices have been lower, indicating that consumers have reined in some discretionary spending amidst a period of high economic uncertainty.
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