In September, wholesale prices in the United States reached an all-time high.
According to official data released Thursday, wholesale prices in the United States increased 8.6% in the 12 months ending in September, the largest increase in almost a decade.
The Labor Department announced that double-digit increases in food and energy costs drove the producer price index (PPI) to a new high, the greatest since the figures were first calculated in November 2010.
Even when food and energy expenses were excluded, wholesale price inflation remained high at 5.9%.
The annual indicator, which has tracked rising prices for enterprises as they struggle with global supply chain bottlenecks and labour shortages during the rapid surge in demand as economies reopen following the Covid-19 outbreak, set a new high for the sixth consecutive year.
PPI, on the other hand, fell to 0.5 percent in September, seasonally adjusted, and only 0.1 percent if food and energy, as well as trade services, are omitted.
“Worsening supply-side dynamics and recent commodity price acceleration will keep pricing pressures sticky and elevated far into next year,” said Oxford Economics’ Mahir Rasheed.
However, he believes that PPI inflation would decline in the following quarters.
Without seasonal adjustment, gasoline prices jumped 3.9 percent last month, while overall energy prices are more than 36 percent higher than September 2020, according to the data.
Energy demand fell as transportation and travel were halted during the epidemic in 2020, but it has since rebounded, with oil prices recently rising above $80 a barrel for the first time in years.
Price surges are expected to subside once supply restrictions are overcome, according to policymakers.
The elevated inflation readings, according to Rubeela Farooqi of High Frequency Economics, “represent pandemic-related consequences” that should fade.
“There is a risk of more prolonged headwinds from broken supply chains, which might keep goods prices and inflation higher for longer than projected,” she added.