Several organizations and analysts have published forecasts for the Producer Price Index (PPI) in the United States for the next 12 months (roughly August 2025 to July 2026). Here’s our take ahead of the Jackson Hole Economic Policy Symposium to be held Aug. 21-23. This year’s theme is “Labor Markets in Transition: Demographics, Productivity, and Macroeconomic Policy” should be pivotal in where we head going into 2026.

Current context

• The Producer Price Index (PPI) for final demand in July 2025 increased by 0.9% month-over-month (seasonally adjusted).
• On an unadjusted basis, the final demand PPI was up 3.3% for the 12 months ending in July 2025, which was the largest 12-month increase since February 2025.
• The rise in service prices (1.1%) accounted for most of the July increase, according to Reuters.
• Core PPI (excluding food and energy) advanced 0.6% in July. 

Forecasts for the next 12 months

• Trading Economics forecasts the United States Producer Prices Change to be 3.00% by the end of the current quarter (ending September 2025). In the long-term, they project it to trend around 2.80% in 2026 and 2.70% in 2027.
• Trading Economics also predicts that the core Producer Price Index (Final Demand Less Foods and Energy) year-over-year change will be 3.20% by the end of the current quarter. Their long-term projection for this figure is around 3.10% in 2026 and 2.90% in 2027.
• In August 2025, it was noted that US producer inflation was expected to pick up slightly. Headline producer inflation was forecast to accelerate to 2.5% year-on-year in July (up from 2.3% in June) and core producer inflation was expected to pick up to 2.9% year-on-year (up from 2.6% in June). 

Factors influencing the PPI

• Tariffs and Trade Tensions: Ongoing tariffs and trade tensions are considered significant factors driving up costs throughout the supply chain.
• Supply Chain Disruptions: Broader economic challenges like supply chain disruptions also contribute to inflationary pressures.
• Monetary Policy: The unexpected surge in producer prices could impact the Federal Reserve’s policy decisions, including potential interest rate adjustments.
• Passing on Costs: Businesses may pass on increased costs to consumers, potentially leading to future hikes in consumer prices. 

Important considerations

• Forecasting PPI can be challenging due to various factors like political climates and global events.
• It’s important to keep an eye on trends rather than solely focusing on precise predictions.
• Upcoming data releases, such as the Consumer Price Index (CPI), will be crucial for further insights into inflation trends.