Surging goods, services prices boost US producer inflation
www.reuters.com

... Summary

- - - Producer price index jumps 0.9% in July

- - - Strong increase in both services and goods

- - - BLS ends calculation of 350 indexes due to underfunding

- - - Economists expect tariffs to drive up inflation soon

- - - Weekly jobless claims fall 3,000 to 224,000

"This is a kick in the teeth for anyone who thought that tariffs would not impact domestic prices in the United States economy," said Carl Weinberg, chief economist at High Frequency Economics. "This report is a strong validation of the Fed's wait-and-see stance on policy changes." ...

Goods prices vaulted 0.7%, the biggest gain since January, after climbing 0.3% in June. A 1.4% surge in food prices accounted for 40% of the broad increase in the cost of goods.

Food prices were driven by a 38.9% acceleration in the cost of fresh and dry vegetables. There were also increases in the prices of meat and eggs. Excluding food and energy, goods prices increased 0.4%, with strong rises in the costs of steel, aluminum and primary nonferrous metals.

Services prices soared 1.1%, the largest gain since March 2022, amid strong increases in machinery and equipment wholesaling, and costs of portfolio management, hotels and motels, and road transportation of freight.

In the 12 months through July, the PPI increased 3.3% after advancing 2.4% in June.

"While businesses have assumed the majority of tariff costs increases so far, margins are being increasingly squeezed by higher costs for imported goods," said Ben Ayers, senior economist at Nationwide. "We expect a stronger pass-through of levies into consumer prices in coming months with inflation likely to climb modestly over the second half of 2025." ...

Trump Says Inflation Has Hit 'Perfect Number'
stocktwits.com

... The President said there's hardly any inflation at all, citing that 401(k)s and the stock market are soaring. ...

U.S. President Donald Trump said inflation has hit the perfect number' during remarks celebrating the 90th anniversary of the Social Security Act at the White House.

"Inflation is now down to the perfect number. We've ended Biden's inflation nightmare," the President said, citing that 401(k)s and the stock market are soaring. "There's hardly any inflation at all." ...

The rich now own a record share of stocks (2024)
www.axios.com

... About 93% of U.S. households' stock market wealth is held by the top 10%.

Why it matters: This stat -- first spotted in the FT -- is a crucial bit of context to keep in mind amid the heavily hyped surge of smaller retail investors who flocked to the stock market during and after the COVID crisis.

Details: While it's true that a record high 58% of American households do own stocks via mutual funds or as individual shares, in the aggregate the amount of stock most of these folks own is tiny. ...

The Ultrawealthy Have Hijacked Roth IRAs. The Senate Finance Chair Is Eyeing a Crackdown. (2021)
www.propublica.org

... Senate Finance Committee Chairman Ron Wyden said on Thursday he is revisiting proposed legislation that would crack down on the giant tax-free retirement accounts amassed by the ultrawealthy after a ProPublica story exposed that billionaires were shielding fortunes inside them.

"I feel very strongly that the IRA was designed to provide retirement security to working people and their families, and not be yet another tax dodge that allows mega millionaires and billionaires to avoid paying taxes," Wyden said in an interview.

ProPublica reported Thursday that the Roth IRA, a retirement vehicle originally intended to spur middle-class savings, was being hijacked by the ultrawealthy and used to create giant onshore tax shelters. Tax records obtained by ProPublica revealed that Peter Thiel, a co-founder of PayPal and an investor in Facebook, had a Roth IRA worth $5 billion as of 2019. Under the rules for the accounts, if he waits till he turns 59 and a half, he can withdraw money from the account tax-free. ...