American Businesses See Largest Producer Price Surge Since Tracking Began | Beaufort County Now | Price levels for businesses just saw their largest-ever surge.

Coronavirus Disease 2019 (COVID-19)
Publisher's Note: This post appears here courtesy of the The Daily Wire. The author of this post is Ben Zeisloft.

    Price levels for businesses just saw their largest-ever surge.

    According to data released Tuesday by the Department of Labor's Bureau of Labor Statistics, the Producer Price Index (PPI) — which tracks changes in input prices for businesses and other domestic producers — experienced a 6.6% year-over-year increase. According to the agency, the increases are the largest "since 12-month data were first calculated in November 2010."

    Producer prices rose by 0.8% from April — a rate that significantly exceeded Dow Jones' forecast of 0.5%. In January, February, March, and April, the year-over-year increases in the PPI were 1.6%, 2.8%, 4.2%, and 6.2%, respectively.

    The report was released as Wall Street looks to the Federal Reserve's pending decision on interest rates. Although the central bank has previously committed to aggressive quantitative easing through 2023, rising inflation could lead the Board of Governors to scale back their expansion of the money supply in order to maintain price stability.

    Indeed, the Consumer Price Index (CPI) — which measures price levels for household goods — climbed by 0.6% last month in a 5% year-over-year increase.

    The Bureau of Labor Statistics explained that much of the PPI's surge was attributable to rising lumber, fuel, and food costs:

  • A major factor in the May advance in prices for processed goods for intermediate demand was the index for lumber, which increased 15.5 percent. Prices for diesel fuel; utility natural gas; structural, architectural, and pre-engineered metal products; ethanol; and beef and veal also moved higher.

    Amid inflationary pressures, the rise in the PPI is worrying business leaders.

    As The Wall Street Journal reports:

  • For years economists paid minimal attention to the PPI since it tends to be volatile and doesn't always move in sync with CPI, said Veronica Clark, economist at Citi.
  • That has changed since January, she said. That month, the PPI surged 1.3% versus the previous month and has stayed elevated since. The pickup at the start of the year presaged the stronger-than-expected rise in consumer prices in April and May.

    Bill Adams — senior economist at PNC Financial Services Group — remarked that "PPI matters much more than it usually does because inflation matters much more than it has for years."

    "We haven't had an inflationary shock like this in a decade," he explained. "We know we're in the middle of an inflationary shock but what we still don't know is how bad it is. That's a big part of what we're looking to these inflation data for."

    Other analysts — including a team of top economists from Deutsche Bank — believe that rising inflation is far more than temporary in nature.

    "We worry that inflation will make a comeback," wrote the Deutsche economists in a recent report. "Few still remember how our societies and economies were threatened by high inflation 50 years ago... It may take a year longer until 2023 but inflation will re-emerge."
Go Back

HbAD0

Latest Op-Ed & Politics

The New York Times was forced to issue multiple, major corrections for an article published on Wednesday that falsely claimed 900,000 children had been hospitalized for COVID-19 since the start of the pandemic.
As a youth growing up in a United States of America that understood the pain of sacrifice, the remembrance of Pearl Harbor was an annual event.
If data from September regarding women and the economy becomes a trend, Joe Biden and the Democrats may have even more trouble in 2022 in the midterm elections.
With an ever-expanding federal government, the U.S. has fallen out of the top five countries for economic freedom, according to a new report from the Fraser Institute.
Fauci ‘sabotaged early treatment'

HbAD1

A city’s supposed attempt to make faces on a mural not “specifically identifiable” ended up depicting a black firefighter as white, and now she’s suing for defamation and negligence.
Many North Carolinians breathed a sigh of relief last week when the GOP-led legislature and Democratic Gov. Roy Cooper came to terms on a budget for the new biennium.
The North Carolina Court of Appeals on Monday morning issued an order temporarily suspending candidate filing for all U.S House of Representatives, N.C. Senate, and N.C. House contests.
Given the enormity of the public and private investment in US higher education, of course we should evaluate its effectiveness. But, how?
Ana Kasparian, a cohost of the popular progressive online news show “The Young Turks,” offered a strong defense of her debate with Daily Wire editor emeritus Ben Shapiro this week, calling out the Left for “platform scolding.”
Having trouble getting a hair appointment or other services? There are three bills sitting in the Senate Rules Committee that sponsors say would loosen bureaucratic red tape for some small service businesses.

HbAD2

 
Back to Top