(The Center Square) – The Department of Labor’s Bureau of Labor Statistics released new economic data Tuesday showing that the producer price index, a key indicator of inflation, has risen 9.6% in the last 12 months, a major increase that has economists worried.
The PPI for final demand rose 0.8% in November alone. The 9.6% spike in the last year is the highest increase since the federal government began tracking this data in 2010.
“Final demand prices moved up 0.6 percent in each of the 3 prior months,” BLS said. “The index for final demand services rose 0.7 percent in November, the eleventh consecutive advance. Over half of the broad-based increase in November can be traced to prices for final demand services less trade, transportation, and warehousing, which climbed 0.6 percent. The indexes for final demand trade services and for final demand transportation and warehousing services also moved higher, rising 0.6 percent and 1.9 percent, respectively.”
These numbers do not totally capture the overall inflation rate, but give an idea of how prices have been skyrocketing in recent months.
The price increases for producers were spread across a range of industries.
“Leading the November increase in the index for final demand services, prices for portfolio management advanced 2.9 percent,” BLS said. “The indexes for guestroom rental; securities brokerage, dealing, investment advice, and related services; fuels and lubricants retailing; airline passenger services; and transportation of freight and mail also moved higher. In contrast, margins for chemicals and allied products wholesaling fell 1.3 percent.”
This data comes just days after the consumer price index, another leading marker of inflation, showed a 6.8% increase in prices.
“The monthly all items seasonally adjusted increase was the result of broad increases in most component indexes, similar to last month,” BLS said. “The indexes for gasoline, shelter, food, used cars and trucks, and new vehicles were among the larger contributors. The energy index rose 3.5 percent in November as the gasoline index increased 6.1 percent and the other major energy component indexes also rose. The food index increased 0.7 percent as the index for food at home rose 0.8 percent.”
The CPI figure was the highest in 39 years.
“The all items index rose 6.8 percent for the 12 months ending October, the largest 12-month increase since the period ending June 1982,” BLS said. “The index for all items less food and energy rose 4.9 percent over the last 12 months, while the energy index rose 33.3 percent over the last year, and the food index increased 6.1 percent. These changes are the largest 12-month increases in at least 13 years in the respective series.”
Meanwhile, inflation numbers have become a political problem for the Biden administration.
An ABC/IPSOS poll released Sunday reported that 57% of Americans surveyed disapprove of Biden’s economic policies, particularly his handling of inflation, which has a 69% disapproval rating.
Republicans have laid the blame for these numbers at Biden’s feet and argued the federal government should hold off on Biden’s multi-trillion dollar social spending plan while inflation remains elevated.
“Inflation numbers off the charts – thanks to Joe Biden,” Sen. Josh Hawley, R-Mo., said in a statement after the producer price index was released.