US producer price inflation bounced in July to its highest reading since 2022, data showed Thursday, with underlying signs that businesses are facing pressures from President Donald Trump’s tariffs.The rise in services costs exceeded that in goods, contributing to a markedly larger advance than analysts expected.But economists noted that the headline increase might be overstated — boosted by a range of volatile factors — even as there are also price gains in goods exposed to tariffs.The producer price index (PPI) rose 0.9 percent on a month-on-month basis after a flat reading in June, said the Department of Labor.A Briefing.com analyst consensus forecast expected a much smaller jump of 0.2 percent.The PPI measures changes in producers’ prices, and the report is seen by some as a bellwether for what consumers could face in the months ahead if firms choose to pass on more costs.On Wall Street, all three major US indexes retreated after the report but generally shook off early losses.Businesses have been grappling with Trump’s sweeping tariffs after he targeted most trading partners with a 10-percent levy this year, alongside steeper levels on sectors like steel and aluminum.The latest numbers took the overall PPI figure to 3.3 percent from a year ago, said the Bureau of Labor Statistics.The cost uptick in goods was 0.7 percent while that of services was 1.1 percent — marking the biggest such jump since March 2022 as well.While the advance was “broad-based” in July, more than three-quarters can be traced to services, the Labor Department said. Much of this was due to trade services, relating to changes in margins for wholesalers and retailers. Economists noted this was a sign that trade disruptions are hitting supply chains, though trade services are also a volatile component.Prices for final demand goods made a big advance too, with 40 percent of the July increase traced to foods.- Fed dilemma -All of this complicates the Federal Reserve’s job as it seeks to balance inflation risks with the health of the labor market in mulling the right time for the next interest rate cut.Fed policymakers have been monitoring the impact of tariffs on consumer inflation, with some officials arguing the hit will be one-off and others cautious about more persistent effects.”Input costs for producers jumped in July as price pressures for businesses build from compounding tariff impacts,” said Nationwide senior economist Ben Ayers in a note.”While businesses have assumed the majority of tariff costs increases so far, margins are being increasingly squeezed by higher costs for imported goods,” he added.He said that tariff price hikes were most obvious within metal and food categories, with readings for steel and aluminum — both targeted with 50-percent levies — jumping in recent months and adding to cost concerns for manufacturers.Ayers expects more of the tariff burden borne by companies so far to pass through to consumer prices in the coming months.”Tariff-exposed goods are rising at a rapid clip, indicating that the willingness and ability of businesses to absorb tariff costs may be beginning to wane,” added Matthew Martin, senior US economist at Oxford Economics.The effects of Trump’s tariffs on consumer inflation have been limited for now, with a key gauge — the consumer price index — steady at 2.7 percent in July.This, combined with government employment data showing that recent hiring numbers were significantly weaker than estimated, has raised the odds of a September rate cut by the central bank.Martin said the PPI data “provides a counter-balance to these reports” and highlights the Fed’s dilemma.”The big picture remains that inflation is further away from the Fed’s target than the unemployment rate and is likely to climb further over the coming months,” he said.”The path forward will have to traverse a tight rope between the next employment and price reports,” Martin added.

California unveiled plans to redraw its electoral districts Thursday, as Democrats push back on what they say is Donald Trump’s effort to rig next year’s Congressional elections to safeguard his slim Republican majority.Governor Gavin Newsom said he would ask voters to approve new maps that would effectively neutralize changes Texas is planning that are expected to give Republicans more seats in the House of Representatives.”Today is Liberation Day in the State of California,” Newsom told supporters at the Democracy Center in Los Angeles.”Donald Trump, you have poked the bear, and we will punch back,” he said, a reference to the animal that symbolizes the 39-million strong state.The move came after weeks of maneuvering in Texas, where Governor Greg Abbott — acting at Trump’s behest — is trying to redraw electoral districts to benefit his Republican Party, a process known as gerrymandering.Districts are usually redrawn every ten years after the national census and are supposed to be based on its findings, so that districts accurately represent the people who live there.The mid-decade effort to change the boundaries is seen by Democrats as a naked attempt to bolster the GOP, and to help it retain its narrow House majority in next year’s mid-terms.Dozens of Texas Democrats have fled the state in an effort to block the passage of the proposed blueprint during a special legislative session, even as Republicans have threatened to arrest them.Newsom said a special ballot on November 4 would ask California voters to create temporary congressional districts for the next two elections, with power to set boundaries returned to an independent commission thereafter.”We’re doing this in reaction to a president of the United States that called a sitting governor of the state of Texas and said, ‘find me five seats.'”He is, once again, trying to rig the system. He doesn’t play by a different set of rules; he doesn’t believe in the rules.”We have got to recognize the cards that have been dealt, and we have got to meet fire with fire.”Newsom, who is believed to harbor Oval Office ambitions, has emerged as a leading anti-Trump voice from a Democratic Party still floundering after last year’s ballot box drubbing.The two men have frequently locked horns, including over aggressive immigration enforcement raids the administration ordered in Los Angeles.In June, after thousands took to the streets to protest seemingly indiscriminate arrests by masked and unidentified agents, Trump sent in the National Guard and the Marines, claiming it was necessary to restore order.On Thursday, masked Border Patrol agents were seen outside the Democracy Center, part of a museum in the Little Tokyo district of Los Angeles, despite there being no obvious presence of their usual arrest targets.Newsom’s press conference came after he had trolled Trump for days on social media, aping the president’s instantly recognizable style.A series of all-caps posts from Newsom’s official account have employed Trumpian language and been sprinkled liberally — if not logically — with punctuation, as well as nicknames, boasts and silly-sounding threats.”DONNIE J. AND KaroLYIN’ LEAVITT WILL HAVE THEIR (LITTLE) HANDS “FULL” TODAY,” read one tweet on Thursday, referring to the president and his press spokeswoman.”I, GAVIN CHRISTOPHER NEWSOM, AMERICA’S FAVORITE GOVERNOR (MANY SAY), WILL HOST THE GREATEST PRESS CONFERENCE OF ALL TIME. AFTER THAT — “THE MAPS” WILL SOON BE RELEASED. VERY MUCH ANTICIPATED.”