The timeliness of Trump’s comments came a day before West Texas Intermediate crude, the U.S. benchmark, surged above $103 a barrel on Sept. 10. That was up more than 7% in a day and roughly 50% from its July 2 low, according to Bloomberg.
The surge has put energy prices at the center of the cost-of-living debate, just in time for the November 3 midterms. More expensive crude means higher gasoline and diesel prices, but the effects reach much further, pushing up transportation and shipping costs that can eventually show up in consumer prices.
Trump argues that Iran is prolonging the conflict to influence the U.S. election and won’t be able to hold out once Americans have voted. But his prediction also leaves consumers facing nearly two more months of uncertainty as the war continues to disrupt oil flows and shipping routes across the Middle East.
The inflation pipeline is filling up again
Asking Americans to endure more economic pain from oil prices comes as government data shows that producer inflation is ratcheting up again. On Sept. 10, the Bureau of Labor Statistics reported that the Producer Price Index climbed 0.4% in August and 5.4% annually. As CNBC reported, the annual reading was higher than economists’ forecasts.
Historically, producer inflation has reached consumers, often months later. In May, agricultural economists at Purdue University estimated that rising energy, transportation, packaging and processing costs can take three to six months to work their way through the food supply chain and reach grocery shelves.
Apollo chief economist Torsten Slok has also been tracking signs of renewed inflation in recent months, pointing to the ISM Services Prices Paid Index, a less widely followed measure within the monthly PMI report.
Slok’s analysis shifts the index forward by six months to show how closely it has tracked subsequent moves in consumer prices. On that basis, the index recently climbed to levels last seen during the 2021–2022 inflation surge, which Slok said points to “upside risks” for inflation.
Against this backdrop, Trump is asking Americans to believe relief is coming after the election, even as trust in federal government information is already falling.
Americans have a trust problem
A recent survey by The Associated Press-NORC Center for Public Affairs Research and USAFacts helps put that challenge into perspective.
