Accountability
Producer prices rose 11.2% from a year ago in March, the biggest gain on record
According to recent data, the prices paid to U.S. producers significantly increased in March from just a year ago by the highest amount seen in records that date back to 2010.
The hike surpassed all estimates and highlighted persistent early stage inflationary pressures that could possibly be felt by consumers.
Since March of last year, the producer price index for final demand jumped 11.2 percent and 1.4 percent from the month before, according to recent data from the Labor Department released on Wednesday. The monthly gain was even across all categories and was also the largest on record.
After excluding the volatile food and energy parts, the PPI went up 1 percent from the month before and was up 9.2 percent compared to one year ago.
The PPI and consumer price index reports have emphasized the pressure on the Federal Reserve to increase interest rates faster and more aggressively. Central bankers have accepted a half-percentage point increase in May interest rates.
“Despite the sigh of relief from yesterday’s core CPI reading, this is concerning,” said Jennifer Lee, the senior economist at BMO Capital Markets. “50 bps is starting to feel commonplace.”
The data have shown an intensification of pressures throughout the first full month of Russia’s war in its neighboring country of Ukraine that has caused energy, food, and metals prices to rise. Additionally, transportation bottlenecks and labor shortages are making matters more complicated for both manufacturers as well as other producers looking to balance their supply with steady demand.
The war, which started in late February, caused a spike in energy prices over fears that ending Russian oil and gas would limit supply.
Terry A. Hurlbut has been a student of politics, philosophy, and science for more than 35 years. He is a graduate of Yale College and has served as a physician-level laboratory administrator in a 250-bed community hospital. He also is a serious student of the Bible, is conversant in its two primary original languages, and has followed the creation-science movement closely since 1993.
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