A wholesale inflation increase is indicative of a broader inflation problem in the U.S., according to CNBC.
The numbers: According to the Bureau of Labor Statistics, producer prices at the wholesale level increased by 11% over the past year and 0.5% in April.
- “Excluding food, energy and trade services, core PPI rose 0.6% in April and 6.9% from a year ago, the latter a decline from 7.1% last month.”
- Earlier this week, the BLS reported an 8.3% increase in consumer prices for goods and services from a year ago, down slightly from 8.5% in March.
The factors: Rising gas, groceries and auto prices contributed to the April inflation increase. According to the report, gas prices rose 1.7%, while groceries gained 1.5% and autos saw a 0.8% increase in price, with a particular increase in the cost of used vehicles.
Curbing inflation: The Biden administration has promised legislative action to fight inflation, and last week, the Fed approved a half percentage point increase in its benchmark interest rate.
What they’re saying: “While inflation is likely past the peak in the United States, it has gained considerable momentum over the last two years and is likely to close 2022 well above the Federal Reserve’s 2% objective,” Bill Adams, chief economist for Comerica Bank, told CNBC. “The Fed will want to see clearer evidence that inflation is cooling and higher interest rates are slowing demand before they start thinking about the endpoint of the current rate hike cycle.”
For manufacturers: “Manufacturers continue to cite soaring raw material costs and supply chain disruptions as two of their top challenges, with the rapid acceleration in prices in this data over the past year helping to explain why,” said NAM Chief Economist Chad Moutray.