Prices took an unexpected dip in April, giving Trump’s economic team a boost and leaving many economists questioning their predictions. With inflation cooling and producer costs falling, the numbers are turning in Trump’s favor—despite the ongoing tariff debates.
Key Facts:
- The Producer Price Index (PPI) fell 0.5% in April—the largest drop in five years.
- This marks the first decline in the PPI since October 2023.
- Year-over-year PPI growth slowed to 2.4% in April, down from 3.4% in March.
- Service prices dropped 0.7%, the largest monthly drop since data tracking began in December 2009.
- Wholesale food prices fell 1%, with egg prices plunging 39%.
The Rest of The Story:
April’s drop in the Producer Price Index is the biggest decline in five years, according to the U.S. Bureau of Labor Statistics.
It also marks the first time the index has decreased since October 2023.
Despite a 2.4% increase from last April, this is a significant slowdown from the 3.4% rise recorded in March.
The price of services, a major component, fell 0.7% in April—the largest drop since the services index began in December 2009.
Food prices also saw a significant drop, with wholesale egg prices falling a staggering 39%.
This data follows another positive report for the Trump administration earlier in the week, when the Labor Department reported the lowest inflation rate in four years.
The Consumer Price Index rose just 2.3% year-over-year in April—the smallest increase since February 2021.
Despite widespread warnings, consumer prices for items like clothing and new cars have actually declined.
Trump’s tariffs have been forecast to be catastrophic for the consumer as liberals and legacy media have been reporting dire expectations.
“There was broad anticipation that Trump’s levies on Chinese imports, steel and aluminum and certain Canadian and Mexican products had caused prices for apparel, electronics and other consumer goods to spike,” Poltico reported, but “the opposite has occurred.”
However, some economists and major retailers remain cautious.
Walmart warned it may still have to raise prices due to tariffs.
CEO Doug McMillon stated the company would try to limit price hikes but couldn’t absorb all the extra costs.
He emphasized that narrow retail margins make full absorption of tariff pressure unfeasible.
"We had really good news on the inflation front — both the Producer Price Index, which is your wholesale prices, and Consumer Price Index had the lowest print since fall of 2023," says Senior Counselor Peter Navarro. pic.twitter.com/2afvyo3ZUA
— Rapid Response 47 (@RapidResponse47) April 13, 2025
Commentary:
This is a major win for Trump’s economic strategy and a direct challenge to the predictions made by his critics.
For years, experts warned that tariffs would trigger inflation and squeeze American consumers.
But here we are—with both consumer and producer prices falling.
It’s no accident.
Trump’s approach to tariffs has forced a reshuffling of global trade relationships, encouraging companies to find better, often domestic, solutions.
This shift takes time, and there have been bumps in the road, but it’s proving to be effective.
The decline in prices for everyday items like clothing and cars speaks volumes.
This isn’t a fluke—it’s a sign that American businesses are adapting to the new rules of trade.
Even as Walmart prepares for potential price hikes, the overall picture remains strong.
It’s a balancing act, but one that seems to be moving in the right direction.
As Trump continues to renegotiate trade agreements, we should expect some volatility.
But the trendline is clear: strategic tariffs, when used correctly, can benefit the American economy.
The Bottom Line:
The latest drop in producer prices and a cooled inflation rate are early signs that Trump’s tariff strategy may be working.
Despite all the warnings, the economy is showing signs of strength and resilience.
Some companies may still raise prices, but the overall consumer impact has been far less severe than forecasted.
It’s a strong start to what could be a lasting economic shift.
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