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Economic Report: Wholesale prices rise sharply again and signal persistent U.S. inflation

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The numbers: U.S. wholesale prices rose sharply in September for the ninth month in a row and signaled that the highest bout of U.S. inflation in 30 years is likely to last at least into early 2022.

The producer price index jumped 0.5% last month, the government said Thursday. Higher costs of gasoline, beef, vegetables, electricity and chemicals were the biggest contributors.

Economists polled by The Wall Street Journal had forecast a 0.6% advance.

Although the increase in wholesale prices was the smallest since last December, they have risen at least 0.5% for nine months in a row.

Before the pandemic they averaged less than a 0.2% increase each month.

The pace of wholesale inflation over the past 12 months, meanwhile, rose again to 8.6% from 8.3%. That’s the highest level since the index was reconfigured in 2010, and likely one of the highest readings since the early 1980s.

Other measures such as the consumer price index are also at a 30-year high.

Read: Inflation rises at 5.4% yearly pace in September and stays at 30-year high

Big picture: The burst of high U.S. inflation is not going to subside very quickly like the Federal Reserve once predicted. Many economists think it could stay above 3% all of next year instead of dropping to around 2% as the Fed expects.

Read: High inflation to last awhile, Fed’s Bostic says, and it’s no longer ‘transitory’

The biggest source of inflation is a shortage of business parts and supplies that are gumming up the entire economy. Rising gas prices and labor costs are now adding to the upward pressure on prices.

These problems are expected to persist for months or even longer, raising the odds the U.S. could be facing its biggest period of sustained inflation in decades.

Market reaction: The Dow Jones Industrial Average
DJIA,
-0.00%

and S&P 500
SPX,
+0.30%

were set to open higher in Thursday trades.

: As Port of Los Angeles goes 24/7, brace for shortages of bikes, toys — and more —this holiday season

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