Yesterday, the US released the April PPI data, with market expectations at 2.5%, but the actual recorded value was 2.4%, lower than the previous value of 2.7%, indicating a further slowdown in price increase momentum.
Additionally, the retail data for April only grew by 0.1%, far below expectations, reflecting a significant cooling in consumer spending willingness.
Why has the easing of price pressures led to weak consumption? The core issue lies in the "running ahead effect": Trump's tariff policy has not yet taken effect, but the market is already worried about rising prices of imported goods, causing some consumers to stock up in advance, overstretching their purchasing power, which results in current weak consumer demand.
The contraction in consumer spending transmits upstream, leading to low price increase willingness among merchants, with production and wholesale sectors weakening simultaneously, collectively depressing PPI data.
The combination of data highlights the deep contradictions in the US economy:
Inflation pressures have not completely dissipated, while deflation risks have begun to emerge.
On one hand, price stickiness is hard to eliminate; on the other hand, there are concerns about economic cooling. Meanwhile, Trump's intention to exert economic pressure to force the Fed to lower interest rates has not yet shaken Powell's policy resolve. Balancing multiple risks is currently testing the coordination wisdom of US monetary and fiscal policies.