📍 PPI America increased 4 times the forecast - Tariffs are not the culprit yet.

📌 July data:
- PPI YoY: +3.3% ( forecast +2.5% ), the highest since 02/2025.
- PPI MoM: +0.9% - the strongest since 06/2022.
- Core PPI YoY: +3.7% ( forecast +2.9%), highest since 03/2023.
- PPI services MoM: +1.1% - the highest since 03/2022, pulling the entire PPI up.

📌 Reason:
- Energy rebounded thanks to July oil prices.
- Goods: Vegetable and fruit prices increased by 38.5% MoM, mainly due to the policy of expelling illegal immigrant workers leading to a shortage of labor for harvesting and processing goods. 30% of fresh vegetables from America are imported from Mexico but are still exempt from tariffs under USMCA.
-Services: 50% of the service increase comes from brokerage services ( +6.9% MoM ), focused on vehicles, fuel, and machinery - sectors that are still tax-exempt, indicating that intermediary businesses are capitalizing on rising prices as demand remains strong.

PPI data reinforces Fed Musalem's view: The impact of Trump's tariffs on current inflation is still small, with inflationary pressure primarily coming from immigration policy, labor costs, and pricing by distribution companies.