Nobel laureate economist Paul Krugman has warned that the inflation crisis unfolding under President Trump is likely to deteriorate further, arguing that a sharp surge in wholesale prices offers no relief for American households struggling with rising living costs.

Writing on his Substack, Krugman pointed to the latest Producer Price Index (PPI) report — a Labor Department gauge of the prices businesses receive for their goods before they reach retail shelves — describing it as more alarming than the consumer inflation figures released in recent days. He attributed the added strain on household budgets directly to Trump's policies, citing the Iran war and the administration's tariffs.

According to the Labor Department, wholesale prices jumped 1.3 percent in September — the steepest monthly increase since March 2022. Producer prices also climbed 6.3 percent compared with a year earlier, far surpassing expectations.

The figures followed a Consumer Price Index (CPI) report — the headline measure of what American households pay for goods and services — showing annual inflation accelerating to 3.7 percent in September, up from 3.4 percent in August.

Krugman argued that the wholesale data is particularly troubling because higher business costs tend to flow through to the prices consumers ultimately pay. In his view, the report signals price increases still to come, rather than merely reflecting the costs companies face today. Upcoming CPI and PPI releases will show whether the September jump in producer prices works its way into what shoppers actually pay.

He highlighted diesel fuel prices, which have risen twice as much as gasoline over the past year. Because diesel powers trucks, farms, and other links in the supply chain, those increases feed into the prices of groceries and manufactured goods.

Krugman placed the blame squarely on Trump's policy decisions, contending that the president inherited manageable inflation before driving it higher with Iran and his trade war.

"My basic point — that Trump inherited a relatively benign inflation picture and threw that inheritance away with his tariffs and war — is even clearer from the PPI than the CPI. And the PPI is often a leading indicator of future consumer prices, so there's no relief visible in the near future," he wrote.

Krugman also criticized Trump's "shameful" deal to purchase Russian diesel, arguing that the quantity Putin would deliver would fall short of making a meaningful difference.

He challenged the president's repeated claims that inflation is falling, writing: "Is he deliberately lying, or does he truly not know what's going on?"

The economist then questioned whether Trump is receiving accurate information about the economy: "Bear in mind that Trump doesn't read, and he certainly doesn't read BLS data releases. And while he presumably has aides who do know what the numbers say, are they willing to tell him things he doesn't want to hear? Probably not."

Krugman cited a new Fox News poll in which 55 percent of voters said inflation is not under control at all — including 30 percent of Republicans. The same survey put Trump's approval rating at 36 percent, his lowest in Fox News polling, as Republicans approach November's midterm elections amid mounting voter frustration over the cost of living.

He added that voters expressed deep concern about government corruption, another issue that poses problems for Republicans.

"If these numbers don't generate a blue wave, nothing will," Krugman concluded.