Producer prices decline; Port cargo traffic slumps

August’s costs that U.S. companies incurred to produce goods and services posted an unexpected 0.1% decline from the prior month, with the annual rate of cost escalation at 2.6%, down from 3.3% in the prior month. But the latest Labor Department numbers showed costs remaining elevated by historical standards in several categories, including some construction materials.

Construction trade groups said tariffs were the primary factor as iron and steel prices rose 9.2% from a year earlier and copper wire and cable costs jumped 13.8%. Overall, August costs for construction materials and services rose 0.2% from the prior month and increased 2.3% from a year earlier.

“Construction materials prices rose modestly in August, although the increase would have been larger if not for declining oil and natural gas prices,” Anirban Basu, chief economist for Associated Builders and Contractors, said in a statement.

Analysts noted producer prices, also known as wholesale prices, often affect consumer prices and could also figure into future Federal Reserve decisions on interest rates. The government on Thursday is scheduled to release the latest consumer price index report, including the August inflation rate. 

Import cargo volumes at major U.S. ports have trailed off after shipments surged in early summer, when retailers and other companies sought to bring in items before tariffs took effect. The decline could last for the rest of 2025, potentially affecting demand for real estate near ports.

Ports during July processed a peak 2.4 million containers, measured as 20-foot-equivalent units, and that figure is forecast to shrink to 1.7 million by December, according to the National Retail Federation and logistics consulting firm Hackett Associates. “The trade outlook for the final months of the year is not optimistic,” Hackett Associates founder Ben Hackett said in a statement.

Final data has not been issued by ports, but the NRF and Hackett are forecasting monthly and year-over-year cargo volume declines for each month from August to December. “Retailers have stocked up as much as they can ahead of tariff increases, but the uncertainty of U.S. trade policy is making it impossible to make the long-term plans that are critical to future business success,” said Jonathan Gold, the retail group’s vice president for supply chain and customs policy.