Wholesale Prices Were Flat In July. The Inputs Walmart Suppliers Buy Were Not.

The Producer Price Index for final demand was unchanged in July on a seasonally adjusted basis, the Bureau of Labor Statistics reported Thursday, below the Dow Jones consensus estimate of a 0.2% increase, according to CNBC. The Bureau also revised its June reading, originally reported as a 0.3% decline, to a decline of 0.1%. On an unadjusted basis, final demand prices are up 4.7% over the twelve months ended in July.

Final demand goods fell 0.7%, driven by a 3.1% decline in energy and a 0.9% decline in foods. Final demand services rose 0.2% and final demand construction advanced 2.2%. Strip food and energy out of the goods number and the relief disappears: final demand goods less foods and energy rose 0.1% in July and is up 4.9% over twelve months. Final demand less foods, energy, and trade services rose 0.4%, its largest monthly gain since May, and is up 4.7% year over year.

For suppliers selling into Walmart, the timing is specific. Walmart’s fiscal first quarter ended April 30, which places its fiscal second quarter across May, June, and July. Thursday’s data is the last monthly producer price reading in that window. On the first quarter earnings call on May 21, Executive Vice President and Chief Financial Officer John David Rainey told analysts the cost environment was producing “real impacts to cost of goods sold for us and our suppliers,” and said that if those elevated conditions held, Walmart would expect somewhat higher retail price inflation in the second quarter and the second half of the year.

Fuel Is Where The Pressure Came Off

Rainey said Walmart absorbed approximately $175 million, or about 250 basis points of operating income growth, from higher than planned fuel costs in its global distribution and fulfillment operations during the first quarter. Adjusted operating income growth in constant currency came in at approximately 5%. Asked what the second quarter outlook assumed, he said Walmart was generally assuming the fuel environment it was operating in at that moment. The company guided second quarter operating income growth of 7% to 10% in constant currency on that basis.

Final demand energy prices have fallen in both months since, dropping 6.5% in June and 3.1% in July, with gasoline down 5.7% in July. Those declines follow an 8.2% increase in May. Two consecutive drops have not erased the year: final demand energy remains 18.2% above July 2025.

Freight moved with it. Prices for truck transportation of freight fell 1.8% in July. Final demand transportation and warehousing services fell 1.8% as well, and transportation and warehousing of personal consumption goods declined 1.3%. Those are the first meaningful concessions on a line that has pressured suppliers all year, and they remain partial. Transportation and warehousing of personal consumption goods is still up 9.8% over twelve months, and the broader final demand category is up 10.0%.

Food told a mixed story. Final demand foods fell 0.9%, with the Bureau citing declines in fresh and dry vegetables, and separately noting lower prices for meats, raw milk, and slaughter steers and heifers in the intermediate demand detail. Prices for grains, however, increased. Rainey described that mechanism on the May call, characterizing food as heavily dependent on fertilizer, nitrogen, and phosphates, and saying that if fuel prices persisted at that level, average unit retail prices could face upward pressure. Suppliers in fertilizer-dependent categories should watch whether grains continue to diverge from the rest of the food complex.

Packaging And Manufacturing Materials Are Where It Did Not

The intermediate demand tables are where a supplier’s input costs live, and they did not follow the headline.

The index for containers for intermediate demand rose 1.6% in July after rising 0.8% in June, its largest monthly increase in the period shown in Thursday’s release, and it rose in every month shown. Over twelve months, containers are up 5.1%. That series covers the packaging a manufacturer buys.

Processed goods for intermediate demand fell 0.6% for the month while sitting 9.9% above July 2025, more than double the headline rate. Materials and components for manufacturing slipped 0.2% and remain up 9.5% year over year. The split beneath that figure matters by category: materials for nondurable manufacturing, which covers inputs to goods with a life expectancy under three years, fell 2.1% in July but remain 10.3% above July 2025, while materials for durable manufacturing rose another 0.8% in July and are up 17.6% over twelve months. Within the product detail, lumber prices increased 5.0%, while thermoplastic resins and materials, basic organic chemicals, and meats declined.

The Import Data Is The Larger Number For Anyone Sourcing Abroad

A separate Bureau of Labor Statistics program tells a sharper version of the same story. Its most recent reading covers June and published July 17.

Nonfuel import prices rose 4.2% over the twelve months ended in June, which the Bureau identified as the largest such increase since the year ended June 2022. Import prices for consumer goods excluding automotives rose 0.3% in June, the fifth consecutive monthly advance for that index, with the Bureau attributing June’s gain to higher prices for apparel, footwear, and household goods.

Import prices from China rose 0.9% in June, which the Bureau noted was the largest monthly advance since January 2008. Over twelve months, prices for Chinese imports are up 1.3%, the largest twelve-month increase since the year ended November 2022.

One line in that release corroborates the packaging finding from an entirely separate survey instrument. Import prices for nonfuel industrial supplies and materials rose 1.2% in June after a 1.0% advance in May, and the Bureau attributed the increase in part to higher prices for chemicals and finished nonmetals, a category it defines to include boxes. Two independent BLS programs, both showing packaging moving up.

July import and export price data publishes Tuesday, August 18.

Retail Margins Rose On The Categories Walmart Sells Most

Final demand trade services, which measures margins received by wholesalers and retailers rather than the prices of goods themselves, fell 0.1% overall in July. The aggregate conceals the relevant movement. Trade of personal consumption goods rose 1.0% in July after rising 2.2% in June, and is up 4.7% over twelve months.

In the product detail, the Bureau identified higher margins for food and alcohol retailing, for health, beauty, and optical goods retailing, and for food and alcohol wholesaling. Those are among the categories where Walmart moves the most volume, and where the margin conversation between merchant and supplier is most active.

1P And 3P Are Reading Two Different Datasets

For 1P suppliers, the flat headline will show up in cost conversations. A merchant who reads that wholesale prices did not move in July has a reasonable question about a cost increase request, and the honest answer is category-specific rather than national. The counter sits in the intermediate demand tables: containers up 1.6% for the month and 5.1% for the year, nondurable manufacturing materials up 10.3% year over year, durable materials up 17.6%. A supplier walking into a line review or a joint business planning conversation carrying only the national number is bringing the weaker half of the data. Rainey’s acknowledgment that these costs reach suppliers as well as Walmart is useful context for that conversation, though it is not a commitment to absorb them.

For 3P Marketplace sellers, no cost increase mechanism exists to negotiate. The import figures land more directly here, particularly for sellers sourcing apparel, footwear, and household goods, which the Bureau named as drivers of a consumer goods import index that has now risen five months running. Those costs come out of margin or go into the retail price, where they surface in Buy Box competitiveness against sellers who bought inventory at different points in the year. The freight relief is real for sellers moving their own units, though the twelve-month figures suggest a partial correction rather than a return to prior levels. Rainey also said units shipped same day or next day through Walmart Fulfillment Services grew nearly 150% in the quarter. The implication for sellers on WFS is that a growing share of their volume now moves through the same network where Walmart booked its fuel pressure.

Walmart reports second quarter fiscal 2027 results on August 20 at 6 a.m. Central, with the analyst call at 7 a.m., two days after the July import data lands and roughly three weeks before the next producer price release on September 10. Rainey guided the quarter on the fuel environment as it stood in May. That line has since moved in Walmart’s favor. The lines that feed a supplier’s cost of goods sold have not, and August 20 is when suppliers find out which of the two the company’s own numbers reflect.

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