Wholesale prices increased 9.6% in November compared to the same time in 2020, marking their biggest year-to-year jump on record and presenting another sign that inflation is becoming a bigger economic issue, according to a U.S. Labor Department report on Tuesday (Dec. 14).
The November Producer Price Index jumped 0.8% in November, pushing the annual increase close to 10%. Economists had expected a 9.2% jump, according to FactSet.
Energy and trade services prices were up 0.7% in November, putting the core PPI at 6.9%, which marks the largest gain on record. Consumer prices are also increasing at the fastest pace in almost 40 years, and core inflation is increasing faster than it has in almost 30 years, CNBC reports.
Demand for goods rose 1.2% in November, down from the 1.3% increase in October. Final demand services inflation ran at a 0.7% monthly rate compared to 0.2% in October.
The Fed could start raising interest rates in the middle of next year. Chairman Jerome Powell and others recently said they aren’t expecting the economic inflation to be temporary or tied to the COVID-19 pandemic, but that it is more a function of supply chain snafus and steadily increasing consumer demand.
Energy prices jumped 2.6% in November, while food prices were up 1.2% for the month. Transportation and warehousing moved up 1.9%, while portfolio management rose 2.9%.
Advertisement: Scroll to Continue
Related news: FTC Probes Supply Chain Issue; Orders Walmart, Kroger and Wholesalers to Provide Data
Last month, the Federal Trade Commission (FTC) pushed nine large retailers, wholesalers and suppliers of consumer goods to give information on supply chain-related slowdowns.
The FTC’s study will also look at whether the supply chain issues have been leading to specific bottlenecks, shortages or anti-competitive practices, and whether they’ve helped spur rising prices for consumers. FTC Chair Lina Khan has said the objective of the study is to help alleviate supply chain issues for everything from computer chips to medicine to meat.
Walmart, Amazon, Kroger, C&S Wholesale Grocers, Associated Wholesale Grocers, McLane, Procter & Gamble, Tyson Foods and Kraft Heinz will have to report which factors are disrupting their production chains, the impact that has in terms of delayed or canceled orders, the suppliers and inputs most affected, and what the companies are doing to help the problem. They will have 45 days to respond once they receive the order.
