U.S. wholesale prices rise at fastest pace since 2009, PPI shows, as inflation pressures keep ...

[mahatmakanejeeves]

Source: MarketWatch

Economic Report

U.S. wholesale prices rise at fastest pace since 2009, PPI shows, as inflation pressures keep building

Published: May 13, 2021 at 8:41 a.m. ET
By Jeffry Bartash

Producer price index has jumped 6.2% in the past year

The numbers: U.S. wholesale prices increased sharply again in April and signaled that more inflation is bubbling up in the U.S. economy, just a day after another government report showed the cost of living rose at the fastest pace in 13 years.

The producer price index jumped 0.6% last month, the government said Thursday. Economists polled by Dow Jones and The Wall Street Journal had forecast a 0.3% gain. ... What's more, the rate of wholesale inflation in the past 12 months climbed to 6.2% from 4.2% in the prior month. That's the highest level since the index was reformulated in 2009.

Back then a record spike in oil prices drove most of the increase in wholesale prices. Now the cost of many raw and partly finished goods are rising, ranging from farm crops to precious metals to computer chips.

Prices for a variety of goods and services have soared this year after a resurgence in the U.S. economy. Massive government stimulus, rising vaccinations and falling coronavirus cases have underpinned a rapid recovery and businesses can't keep up with demand.

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Read more: https://www.marketwatch.com/story/u-s-wholesale-prices-rise-at-fastest-pace-since-2009-ppi-shows-as-inflation-pressures-keep-building-11620909721

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Hat tip, Ben Shapiro

Ben Shapiro Retweeted

https://twitter.com/benshapiro

INFLATION WATCH: U.S. wholesale prices (PPI) climb 0.6% in April. Increase over the past year moves up to 6.2% from 4.2%. Highest since government began keeping track in 2009. Inflation worries are going to be around awhile and put more pressure on the Fed and the economy.

Link to tweet

[mahatmakanejeeves]

1. From the source:

PPI for final demand advances 0.6% in April, goods and services both rise 0.6%

Economic News Release USDL 21-0859

Producer Price Index News Release summary

Transmission of material in this release is embargoed until
8:30 a.m. (ET), Thursday, May 13, 2021

Technical information: [phone] * [e-mail] * www.bls.gov/ppi
Media contact: [phone] * [e-mail]

PRODUCER PRICE INDEXES - APRIL 2021


The Producer Price Index for final demand increased 0.6 percent in April, seasonally adjusted,
the U.S. Bureau of Labor Statistics reported today. Final demand prices rose 1.0 percent in
March and 0.5 percent in February. (See table A.) On an unadjusted basis, the final demand
index moved up 6.2 percent for the 12 months ended in April, the largest advance since 12-
month data were first calculated in November 2010.

About two-thirds of the April advance in the final demand index can be traced to a 0.6-percent
increase in prices for final demand services. The index for final demand goods also moved up 0.6
percent.

The index for final demand less foods, energy, and trade services rose 0.7 percent in April following an increase of 0.6 percent in March. For the 12 months ended in April, prices for final demand less foods, energy, and trade services moved up 4.6 percent, the largest advance since 12-month data were first calculated in August 2014.

Final Demand

Final demand services: Prices for final demand services rose 0.6 percent in April, the fourth consecutive advance. Half of the broad-based increase in April is attributable to the index for final demand services less trade, transportation, and warehousing, which moved up 0.5 percent. Margins for final demand trade services also rose 0.5 percent, and the index for final demand transportation and warehousing services jumped 2.1 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.)

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________________
The Producer Price Index for May 2021 is scheduled to be released on Tuesday, June 15, 2021 at 8:30 a.m. (ET).

* * * * *

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Information from these releases will be made available to sensory impaired individuals upon request. Voice phone: [phone], Federal Relay Services: 1-800-877-8339.

[oldsoftie]

2. We have to remember than a year ago things were a LOT different.

But true inflation IS here and not going away soon

[Freethinker65]

3. Pretty disingenuous to use last years deep in pandemic numbers for comparison

Yes prices are up. Look at graphs for the past five to ten years though please.

[OneCrazyDiamond]

4. Oh, I get it.

Now that we are in charge, inflation is a concern. You know, when compared to this time last year. I guess it's time to raise the interest rate.

[Deminpenn]

5. Inflation isn't a concern for the Federal Reserve, though

The Fed wants inflation of about 2-3% per year. It hasn't approached that figure for years now.

I doubt any of this was unexpected by economists. After all, the downturn was almost entirely due to everything being shut down for most of the last year by policy. A good comparison would be the pent up demand after WWII. There could also be a similar situation where the US economy is running at full speed while the rest of world's economies still are re-opening.

[OneCrazyDiamond]

9. I hope you right. N/T

[Deminpenn]

10. Fed chair Powell has said publically that the Fed

isn't concerned about inflation and even intends to keep interest rates at or near their current low levels.

[bucolic_frolic]

6. These are supply chain and manufacturing issues from the pandemic shutdown

but manufacturers and retailers will try to make them stick. They will chill when spending power from paychecks replaces spending power from stimulus and production rebounds to meet demand. My guess is that could take a year.

[George II]

7. We're just coming out of a year of virtually no increases and many businesses were closed/cut back.

[OnlinePoker]

8. PPI April 2020 - Largest decline since 2015

U.S. producer prices fell more than expected in April, leading to the largest annual decline since 2015, which could bolster some economists’ predictions for a brief period of deflation as the novel coronavirus depresses demand.

https://www.cnbc.com/2020/05/13/us-producer-price-index-april-2020.html

[UserNotFound]

11. Just take a look at lumber prices,

and building materials in general. We's getting gouged, methinks....

[VarryOn]

12. Too much money chasing too few goods...

If it weren't such a pain to move, I'd have my house on the market. In the last month, I've had two realtors reach out to me saying they had potential buyers interested in my house. Never had that happen before.

My brother and his wife are building a house. Their builder came to them, hat in hand, two weeks ago saying he needed more money due to lumber costs. They had to agree. The builder was willing to walk.

The transportation company I work for has had two major, major shippers voluntarily offer double-digit rate increases for guaranteed capacity. My Q1 bonus was one of the best I've ever seen. Q1 is generally bonus free.

Anecdotal, I know.