Latest Inflation Data Excludes Tariffs, Trump Policy Changes: 2025 Will Be 'Much More Volatile Year,' Economist Says

by Erica Kollmann Benzinga Staff Writer

Zinger Key Points

The weaker-than-expected producer inflation report follows Wednesday's softer than anticipated consumer price index data.
Experts note markets are paying more attention to announcements from the White House than recent economic data.
Find out which stock just plummeted to the bottom of the new Benzinga Rankings. Updated daily—spot the biggest red flags before it’s too late.

All of February's factory cost inflation measures came in lower-than-expected in the Producer Price Index report released Thursday. Economists are weighing in on what it could mean for the U.S. economy going forward.

What To Know: The weaker-than-expected producer inflation report follows Wednesday’s softer than anticipated consumer price index data and bolstered hopes for interest rate cuts in 2025.

Expert Ideas: Gregory Daco, chief economist for EY-Parthenon, said February's PPI data shows that disinflation was occurring before the implementation of tariffs. It remains to be seen if that trend can continue as the trade war escalates.

Daco also pointed to surging egg prices as a leading factor in the pressure on goods prices.

Key take-aways

📉Disinflation WAS firmly in place ahead of tariffs
📈Goods prices pressured by +54% eggs price surge
✅Services prices fell on lower trade margins (40% from machinery & vehicles) which is reassuring
📊Still some pressure regarding PCE passthrough (esp healthcare) pic.twitter.com/L5kAXLA9wS
— Gregory Daco (@GregDaco) March 13, 2025

Bill Adams, chief economist for Comerica Bank, also noted the surge in egg prices that was moderated by lower margins for machinery and vehicle wholesalers.

Following both the cooler-than-expected CPI and PPI reports, Adams suggests that February's PCE index may come in below expectations as well. A cooler number from the Fed’s preferred inflation gauge could benefit markets.

However, Adams said, "Financial markets are paying more attention to announcements from the White House about tariffs and job cuts than the hard numbers."

Chris Zaccarelli, chief investment officer for Northlight Asset Management, cautioned that the latest inflation data reflects only one month and further volatility likely lies ahead.

"Clearly this is going to be a much more volatile year and it remains to be seen if all of the revolutionary changes to the economy and trans-Atlantic alliances will lead to a recession or if it will lead to higher growth rates in the future," Zaccarelli said.

Market Reactions: All three major indexes were red in Thursday's morning trading with the SPDR S&P 500 ETF Trust SPY, tracking the S&P 500, down 0.44% at $556.41 and the Invesco QQQ Trust QQQ, tracking the Nasdaq 100, down 0.88% at $472.74 at the time of publication.

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