Record rise in US wholesale prices over the past yearWednesday, June 16, 2021
WASHINGTON, United States (AP) — Wholesale prices, driven by rising food costs, increased 0.8 per cent in May and by an unprecedented amount over the past year as the US economy emerges from pandemic lockdowns and pushes inflation higher.
The monthly gain in the Producer Price Index, which measures inflation pressure before it reaches consumers, followed a 0.6 per cent increase in April and a 1 per cent jump in March, the Labor Department reported yesterday.
Food prices jumped a sizable 2.6 per cent with the cost of beef and veal rising, though the cost of fresh fruits declined. Energy costs rose 2.2 per cent, reversing a 2.4 per cent drop in April.
Over the past 12 months, wholesale prices are up 6.6 per cent, the largest 12-month increase on record going back to 2010.
Core inflation, which excludes volatile categories, such as food and energy, rose 0.7 per cent in May, the same as April, while core inflation rose 5.3 per cent over the past 12 months, the largest gain on record going back to 2014.
Nearly 60 per cent wholesale price increase from May reflected a 1.5 per cent jump in prices for goods. Prices for services rose by 0.6 per cent.
Last week, the US reported that consumer prices rose 0.6 per cent in May with prices over the past year surging by 5 per cent, the biggest 12-month gain in more than a decade.
Analysts said that the big jump in wholesale prices, following the sizable gain in consumer prices, underscores the current upward movement in inflation.
Shortages of raw materials and intermediate goods are driving a good portion of the rise in wholesale inflation, according to Michael Pearce, the senior US economist at Capital Economics.
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