News outlets have been feeding us with annualized rates, which is making this 0.9 figure sound pale, but it's pretty big because it's for July only. Times 12, it means inflation over 10%. The 3.3% annualized figure in the article is because they've been averaging the past 12 months.
Something in July made the prices jack up in a really serious way.
Just to be pedantic, but the 10% number is the one that is annualized (that is, if an entire year had that monthly rate, what would its inflation be?). It's also not times 12, inflation composes, so it totals to ~11.3%.
The 3.3% figure is annual, normally called "last 12 months" to avoid confusion with a fixed year.
I think that what they're saying is because inflation numbers are typically presented as an annual number (3.3%), when you hear a number like 0.9% it sounds lower to somebody who is not economically literate.
"Prices increased 0.9% in July, which would translate to an annual inflation rate of 11.3%" is one way to say it with more clarity.
Also, Trump has a habit of picking numbers out of context when they suit his personal narrative. For example, not long ago he said something like "The price of gas is down to $1.98 per gallon" when in fact that that number was something along of the lines of the wholesale price. So it's no wonder people are misinformed when they get misleading economic information.
Not only that but a lot of businesses built inventories before the tariffs took place and we're seeing that gone now, from now on we'll likely see more increases as everything that is showing up has a tariff applied.
> The producer price index, which measures final demand goods and services prices, jumped 0.9% on the month, compared with the Dow Jones estimate for a 0.2% gain.
The markets knew about the tariffs when they came up with that estimate.
The relationship between tariffs and inflation is very complex.
In a consumer-based economy, they shouldn't even have any. Society would just react to tariffs with some deflation elsewhere. But since the US economy is now investment-based (a WTF for some other post), there should be some, but I would still expect not much of it.
You mean that in the sense "is it too soon to say we'll have a 10% inflation year?". Certainly, and I don't mean that. I just want to counter the general "annualized inflation figure numbness". But this is not noise. Prices are a real signal.
Something in July made the prices jack up in a really serious way.