Wholesale prices in the United States rose 0.2 percent in December, with total prices skyrocketing 9.7 percent in 2021, the highest 12-month period on record going back to 2010, according to the producer price index (PPI).
This was at half the 0.4 percent Dow Jones estimate, but consumers are still feeling the pinch, with inflation running nearly at a 40-year high, according to a Jan. 13 Labor Department report.
However, it was a major drop-off from November 2021, with the PPI rising by 1 percent, up from 0.6 percent in October.
The total numbers for 2021 are far above the 0.8 percent increase in 2020 and the 1.4 percent rise in 2019.
This comes after the Jan. 12 Consumer Price Index report showed inflation in 2021 rising 7 percent from the previous year, the biggest 12-month gain since June 1982.
The PPI is a key indicator of real growth by adjusting revenue sources for inflation in industries such as manufacturing, agriculture, energy, and transportation.
Core PPI, excluding food, energy and trade, increased 0.4 percent last month.
The price for food and energy both dropped by 0.6 percent and 3.3 percent respectively, while trade was up 0.8 percent, according to the index.
Transportation and warehousing costs rose by 1.7 percent.
Core inflation at the wholesale level, excluding food and energy, rose by 0.5 percent on a monthly basis in December, down from a 0.9 percent jump in November.
Price inflation has been attributed in large part to the unending supply chain crisis at a time of surging consumer demand.
Meanwhile, the unemployment rate for December fell to 3.9 percent.
Weekly jobless claims at the end of last week totaled 230,000, above the 200,000 estimate, and up from the previous week’s figure of 207,000 claims.
Continuing claims fell by 194,000 to 1.56 million, as the four-week average of filings hit its lowest point since June 1973.
The largely downward trend in claims comes amid labor force participation well below pre-pandemic levels and as employee COVID-19 benefits expire.
Despite the decline in the unemployment rate, the total employment levels are about 2.9 million below where it was prior to 2020, with a smaller labor force at nearly 2.3 million.
The post-2021 pandemic recovery has been hampered lately by the rapidly spreading Omicron variant, which has fueled rising cases and more government restrictions.
Rising inflation is forcing a policy shift by the Federal Reserve, which had previously viewed the price pressures as merely transitory.
The Federal Reserve is expected to tighten policy later this year, by raising interest rates in response to the high inflation and a recovering jobs market.
The tightening of rates by the Fed is expected to slow the economy and keep inflation under control by raising borrowing costs for consumers and businesses.
From The Epoch Times