While official inflation data have not shown a dramatic spike—headline inflation still hovers around 3%, stubbornly above the Federal Reserve's 2% goal—there's a growing body of evidence that tariffs are silently doing their part to keep price pressures alive.
With government data sources disrupted by the prolonged Washington shutdown, the private sector has become the market's only compass—and it's pointing to renewed inflation risks.
On Wednesday, a widely watched inflation gauge based on business surveys from the services sector showed cost pressures hitting their highest level in over three years.
While companies have absorbed much of the strain for now, the bigger risk is that the next wave of price hikes gets passed on to consumers.
An Inflation Warning From The Services Sector
The clearest signal of elevated cost pressures from tariffs came from the services sector, which accounts for more than two-thirds of the U.S. economy.
In October, the ISM Services Prices Index jumped to 70%, the highest reading in three years and a level not seen since October 2022. It’s now been above 60% for 11 straight months.
"Respondents continued to mention the impact of tariffs on prices paid," said Steve Miller, chair of the ISM Services Business Survey Committee.
One executive in the Utilities industry noted that tariffs were "causing disruption in contracts" and "driving up pricing on engineered and manufactured equipment," with order delays compounding the strain.
The warning from ...
