US producer price index rose 5.4% year-over-year in August, exceeding forecasts of 5.3%, as Brent crude topped $107 per barrel amid Middle East tensions, increasing pressure on the Federal Reserve ahead of its September meeting.
Consumer prices rose 3.4% annually in August, unchanged from July, as the Iran war pushed gasoline and diesel prices higher. The persistent inflation increases pressure on the Federal Reserve to raise interest rates next week.
President Trump campaigned on crime and economic issues as new data shows he has the highest disapproval rating for any president on record regarding gas prices, with 79% of Americans and 52% of Republicans viewing his handling negatively.
China's producer price inflation eased to 3.5% year-on-year in July, a three-month low and below market expectations, while consumer price inflation slowed to 0.5%, a six-month low. The cooling reflects retreating global energy prices and soft domestic demand despite ongoing geopolitical tensions.
President Donald Trump and Treasury Secretary Scott Bessent publicly demanded that gasoline retailers immediately reduce prices, with Bessent warning "we're watching." The pressure comes as crude oil prices have fallen following progress on reopening the Strait of Hormuz and a memorandum of understanding with Iran, though gas prices had risen 40.5% year-over-year through May.
