Wholesale prices rose far more than expected in July, providing a potential sign that inflation is still a threat to the U.S. economy. CNBC's Eamon Javers joins 'Money Movers' to discuss the White House response to today's hot PPI report.

Washington

The White House has responded to a recent increase in the Producer Price Index (PPI), which came in higher than anticipated. Despite previous frustrations with employment data, officials did not question the legitimacy of the PPI figures. Instead, they emphasized that inflation is less severe than critics had forecast, particularly in the context of tariffs and core goods. The administration credited its economic policies for ending the prior inflation crisis and attracting significant investment to the United States. Economists note that while some inflationary effects are present, they are not as pronounced as initially expected, providing the White House with a strong political position for now.

White House responds after wholesale prices rise more than expected

Let's get to Washington this morning and our Eamon Javers with some reaction to today's PPI number. Morning, Eamon. Good morning to you, Carl. We're getting our first reaction now from the White House to this PPI number this morning. And bottom line is two interesting points. One is, despite their frustration with the BLS over the employment number, they're not calling into question the legitimacy of this number today. And secondly, they're arguing that this number is much better than their critics suggested that it would be at this point. Here's the full reaction from the team here. They say, with the consumer price index running at an annualized rate not seen in over four years and PPI for core goods, which would be the most sensitive to tariffs, now down at a 0.7% annualized rate since January, the doom and gloom predictions of President Trump's tariffs ratcheting up inflation continue to be proven flat out wrong. The Trump administration's policies swiftly put an end to Joe Biden's inflation crisis and as trillions in investments pour into the United States, they're now laying the groundwork for a long-term economic resurgence for the American people. That's an on-the-record statement from White House spokesperson Push to Size. So as you can see, guys, A, no quibbling with the BLS here in terms of methodology, as we saw on the employment side, but arguing here that this picture is much better than Trump's critics suggested it would be by the time we got to August of 2025 in the wake of those tariffs. Back over to you. Which is true. I mean, that is true. Everyone, the entire economics community thought that the tariffs would lead to higher inflation at this point. And look, it's seeping through in certain ways, but it's not what was expected. I mean, politically, the argument is, you know, inflation is not nearly as bad as the critics had suggested. You've got a lot of economists and everybody that you guys are talking to all day long who say, well, it takes time to build in and firms have been absorbing the cost, but they won't do that forever. Politically, though, this gives the White House the opportunity to say, hey, look, right now, go out and look. Inflation is not nearly as bad as the critics said. So we feel like we're on a strong foot. If that changes in the months to come, that's going to change the political picture for this White House. But for right now, they feel like they're on strong footing here. Yeah, well, they don't stop a clock. The transmission mechanism continues on, and we'll see what conversations we're having come holiday. Eamon, thanks. Eamon Javaris.

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