The U.S. May PPI remains moderate, tariff effects may be "reactive"

The report released by the U.S. Bureau of Labor Statistics on Thursday showed that the core PPI data for May fell short of expectations, influenced moderately by the costs of goods and services. Although the currently high tariffs have not yet significantly impacted the American public, economists point out that as companies attempt to avoid further softening of profit margins, price pressures may intensify in the second half of the year. PPI data indicates that after a decline in April, profit margins for wholesalers and retailers expanded in May, particularly in the wholesale automotive and machinery sectors. Profit margins have fluctuated month by month this year, highlighting the uncertainty of trade policies on prices and demand. Analysts are particularly focused on the PPI report, as some of its components are used to calculate the inflation indicators favored by the Federal Reserve. Areas that performed poorly in May include airfare prices, a decline in portfolio management fees, and medical costs remaining moderate. The PCE report will be released later this month