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Inflation Surges as Tariffs Bite: Consumers Brace for Impact
15 Aug
Summary
- Wholesale inflation climbed 0.9% in July, exceeding expectations
- Retail sales and industrial data to provide insights on consumer, economic trends
- Fed's annual Jackson Hole meeting to influence future monetary policy
On August 15, 2025, investors are closely watching a slew of key economic data releases that could provide insights into the state of the U.S. economy. The most notable figure is the producer price index (PPI), a measure of wholesale inflation, which climbed by a far larger-than-expected 0.9% in July compared to the previous month. This report has thrown cold water on earlier indications of softening consumer prices, raising concerns about the impact of tariffs on businesses and consumers.
Alongside the PPI data, investors will also be analyzing the latest figures on import prices, retail sales, industrial production, and consumer sentiment. The import price data is expected to offer clues about how much of the tariff burden is being absorbed by foreign companies, while the retail sales and industrial production figures will reveal how consumers and businesses are responding to the changing economic landscape.
Looking ahead, the Federal Reserve's annual gathering of central bankers in Jackson Hole, Wyoming, next week will be closely watched for its potential influence on future monetary policy decisions. Despite the higher-than-expected inflation reading, the market is still pricing in a high likelihood of an interest rate cut in September, though the chances of a more aggressive half-point reduction have diminished.
