Wholesale prices increased by a record 9.6 percent in November, compared to one year ago, in a sign of continuing inflation pressures, according to a report.
The Labor Department on Tuesday said that its index of producer price that measures inflation before it is experienced by consumers climbed 0.8 percent in November, following an initial 0.6 percent gain in October. It was the biggest monthly reading in four months.
The costs of food, which were down 0.3 percent in October, rose 1.2 percent in November. The price of energy increased 2.6 percent, following an increase of 5.3 percent during October.
The 12-month increase in wholesale inflation was a record, beating the previous records for 12-month increases of 8.6 percent, which were recorded in September and October. The records for wholesale prices date back to 2010.
Core inflation at wholesale that excludes volatile food and energy prices increased 0.8 percent in November. Core prices grew 9.5 percent in the last 12 months.
The rise in wholesale prices was widespread, triggered by the 1.2-percent rise in the cost of goods as well as a 0.7 percent rise in the cost of services.
In the category of goods, the cost of steel scrap and iron increased by 10.7 percent, while the cost for jet fuel, gasoline, and industrial chemicals all climbed up. In the food category, prices for fresh fruits and vegetables increased as the cost of chickens decreased.
The rise in wholesale costs came after Friday’s news that prices for consumers were up 6.8 percent in the 12 months that ended in November, which was the highest increase in nearly 39 years since the cost of energy, food items, and various other goods soared.
The Federal Reserve is scheduled to announce today (Wednesday) that it will increase the rate of reducing its bond purchases per month and is preparing to grow its key benchmark interest rate by mid-2022 as it tries to prove its commitment to control inflation.
Can you believe that the dramatic increase in wholesale prices was driven by higher food and energy costs, and even core inflation, which excludes food and energy, soared by 9.5 percent over the past year? With consumer prices also rising by 6.8 percent over the past year, it’s astonishing that inflation is presenting a significant challenge for businesses and consumers alike. This situation certainly demands close attention and consideration.