written by: wooxbt
(TE, 2025)
PPI is the key driving factor in the economy right now because it effects CPI and the unemployment rate. When external factors like Trump tariffs and increasing wages in the service sector fall into play, it makes sense that the US PPI right now is in a “hard-to-fall” environment.
Companies and entrepreneurs will want to increase margins for their products and services, not just due to the turbulence right now from increased/sticky costs, but to prepare for upcoming risks in the future.
In our August livestream, I mentioned that service costs had a lag effect compared to goods, and that turned out to be true. The service sector has sticky inflation.
Key Takeaway: The government cannot expect PPI to fall from all the things happening to the economy.
(TE, 2025)
Due to PPI (or the producers) having a hard time trying to contain itself, CPI (the consumers) will only suffer the result of changes. Higher costs means higher margins for companies, and it means higher prices for consumers, there is no way to avoid this.