WASHINGTON (AP) – Inflation at the wholesale level rose 8.6 percent in September from a year earlier, the biggest advance since the 12-month turnaround was first calculated in 2010.
The Labor Department reported Thursday that the monthly increase in its producer price index, which measures inflationary pressures before it reaches consumers, was 0.5 percent for September compared to 0.7 percent in August.
A growth of 8.6 percent for the 12 months ending September, compared to a growth of 8.3 percent for the 12 months ending August, a previous record 12-month gain.
On Wednesday, the government reported that inflation at the retail level rose 0.4 per cent in September, with its consumer price index rising 5.4 per cent over the past 12 months, matching the fastest pace since 2008.
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The spurt in inflation this year reflects higher prices for food and energy and many other items from furniture to autos as the pandemic has ripped through supply chains and demand has outpaced supply.
The report on wholesale prices showed that core inflation at the wholesale level, excluding volatile energy and food, was up 0.2 per cent in September from August and was up 6.8 per cent in the previous 12 months.
Nearly 80 per cent of the total increase in wholesale prices last month was attributed to a 1.3 per cent increase in the price of goods, the biggest increase since May. In September, a 40 percent increase in commodity prices reflected rising energy prices. There was a marginal increase of 0.2 percent in price increases for services.
Food prices at the wholesale level rose 2 percent in September, while energy prices rose 2.8 percent, the biggest jump since a 5 percent increase in March.
On Wednesday, President Joe Biden took action in an effort to address supply chain problems, declaring that the Port of Los Angeles would be working 24 hours a day, seven days a week, to remove bottlenecks at one of America’s largest ports. will start working.
Economists said the jump in wholesale and retail prices reflects the effects of the pandemic as strong demand is driving against supply chain problems.
“The impact of demand will ease further in the coming months,” said Rubeela Farooqui, chief US economist at High Frequency Economics. “But there is a risk of more persistent headwinds from broken supply chains that could keep commodity prices and inflation up for longer than expected.”
Minutes released Wednesday of the Federal Reserve’s September meeting gave further indications that the central bank is preparing to pull back its $120 billion in monthly bond purchases, possibly at its next meeting in November, to ease extraordinary support. As the first step of the central bank bank has been providing the economy.