In a surprising twist that’s sending ripples across the financial world, the U.S. Producer Price Index (PPI) dropped by 0.5% in April—its sharpest decline in five years—according to a report from the U.S. Bureau of Labor Statistics.
The unexpected slide is a boon to the Trump administration, which is already touting it as another sign that its economic strategy is working, even as mainstream economists scramble to revise forecasts.
For economists, the April PPI numbers were a shock. Many predicted producer prices would climb last month, especially amid ongoing tariff negotiations and lingering inflationary pressures.
Instead, prices fell across multiple categories. Services—everything from transportation to financial activities—saw a staggering 0.7% decline, the largest since the index began tracking them in 2009. Wholesale food prices dropped 1%, and egg prices alone plummeted an eye-popping 39%.
Add to that a cooling Consumer Price Index (CPI)—which rose just 2.3% year-over-year, the smallest jump since early 2021—and you have the second major economic report this week to defy the doomsayers.
The inflation slowdown is particularly notable given persistent fears that President Trump’s tariffs on Chinese goods and North American metals would cause a cascade of consumer price hikes. Instead, the opposite has happened: prices for cars and clothing, two of the sectors expected to bear the brunt of the tariffs, have actually dropped.
These reports are giving Trump a powerful narrative: that his America-first trade strategy isn’t just about economic nationalism—it might also be delivering results where it counts. His administration has pointed to the data as proof that targeted tariffs, coupled with aggressive renegotiation of trade deals, can discipline global markets without punishing American consumers.
POLITICO, not known for fawning over the Trump administration, even noted that the inflation numbers have caught experts off guard. Their coverage highlighted that “broad anticipation” of inflationary fallout from tariffs has so far been misplaced.
Still, not everyone is ready to pop champagne corks. Walmart CEO Doug McMillon offered a word of caution, warning that retail prices will rise soon if tariffs persist. “We aren’t able to absorb all the pressure given the reality of narrow retail margins,” he said on an earnings call. Translation: the retailer has been holding back the tide, but not for much longer.