Double digit increases in food and energy costs drove another record surge in annual US wholesale prices
Washington (AFP) - US wholesale prices jumped 8.6 percent in the 12 months ended in September, the biggest increase in over a decade, according to government data released Thursday.
Double-digit jumps in food and energy costs compared to last year drove the record gain in the producer price index (PPI), the largest since the data were first calculated in November 2010, the Labor Department reported.
But even excluding food and energy costs, wholesale price inflation was still high at 5.9 percent.
It was the sixth consecutive record for the annual measure, which has tracked rising prices for firms as they deal with global supply chain bottlenecks and worker shortages amid the sudden rebound in demand as economies reopen from the Covid-19 pandemic.
Compared to August, however, PPI eased to 0.5 percent, seasonally adjusted, while the gain came in at a modest 0.1 percent if food and energy as well as trade services are excluded.
“Worsening supply-side dynamics and the recent acceleration in commodities prices will keep price pressures sticky and elevated well into next year,” said Mahir Rasheed of Oxford Economics.
But he said he expects PPI inflation to moderate in the coming quarters.
Prices for gasoline rose 3.9 percent last month, while overall energy prices are more than 36 percent higher than September 2020, without seasonal adjustment, the report said.
Demand for energy collapsed as transportation and travel shut down during the pandemic in 2020, but has roared back, with oil prices in recent days spiking above $80 a barrel for the first time in years.
Policymakers have said they expect the price spikes to ease as supply constraints are resolved.
Rubeela Farooqi of High Frequency Economics agreed the high inflation readings “reflect pandemic-related effects” that should fade.
But, she cautioned, “there is a risk of more persistent headwinds from broken supply chains, that could keep goods prices and inflation high for longer than expected.”