May 13, 2026
We just got a peek into the future of the U.S. economy. Remember yesterday when I said this?
Well, today we got more proof that more financial hardship is likely coming for us all.
The Producer Price Index report was released by the U.S. government this morning. That is the inflation report for wholesale goods and services. That report found that in the month of April, wholesale prices jumped 6% compared to April of last year. That is the largest increase we’ve seen since December of 2022. Between March and April of this year, final demand was up 1.4%. Economists were not expecting that big of a jump. This report is showing the increases are coming for both goods, which increased 2%, and services, which increased 1.2%.
Now, why should you care about what producers are paying for goods and services? Because that’s the peek into the future I was talking about. Typically, those costs that producers pay get passed down to you, the consumer. It’s certainly possible that producers will eat those increased costs, but history shows that’s not normally what happens. These producers stick you with the cost, and we start to see those increases show up in future Consumer Price Index reports — which is the report I was talking about yesterday. That report showed that in the month of April, inflation for you, the consumer, jumped to 3.8%. So it’s reasonable to think that in the next few months we’re going to see the inflation numbers for you jump again as a result of today’s 6% producer number.
I spoke with the president of the Federal Reserve Bank of Chicago today. He is part of the group at the Fed that has input on what happens with interest rates. He says he’s concerned.
Lastly, let’s talk about why this is happening. Producer prices are going up largely because of higher energy costs, which of course are directly related to this war with Iran and disrupted shipping in the Strait of Hormuz. The conflict is putting a strain on the global supply chain and causing shortages of a lot of important goods, including fertilizers, aluminum, and consumer products.
But what’s problematic here is that we’re also seeing producer services inflation go up too.
I talked to President Austan Goolsbee all about the U.S. economy and what you need to know right now. We talked about whether we can trust the data coming out of the U.S. government, and of course we talked about whether he’s worried about President Trump’s nominee Kevin Warsh taking over the Federal Reserve. So if you want to watch that entire interview — and I suggest you do — it’s posted now, or I can email it out to you tonight in my FactsHQ email, so make sure you sign yourself up.
Read the PPI report here.
