The Department of Labor’s Producer Price Index, which measures wholesale prices for goods producers, showed that inflation rose 0.6% in October, and matched the record annual increase of 8.6% set in September.
The Associated Press reported that producer inflation increased by 0.6% from September to October, influenced mostly by high gas prices. Excluding those price increases and food prices, inflation rose 0.4% from month to month and 6.8% from last year.
CNBC reports that the year-over-year increase is the highest figure recorded by the Labor Department in 11 years, whose records go back as far as November 2010. The outlet reported that the increase was in line with Dow Jones estimates and indicate the continual pressures being put on the economy. CNBC reports:
Elevated demand for goods over services again led the inflation story, with the price rises for final demand goods accounting for more than 60% of the index’s increase. Goods prices rose 1.2% compared with just a 0.2% increase for services, while construction prices jumped 6.6%.
One-third of the increase in goods prices came from soaring gasoline, with prices rising 6.7%. Beef and veal prices represented the other side of the ledger, posting a collective decline of 10.3%. The index for light motor trucks, a key driver of inflation this year, moved lower as did residential electric power.
On the services side, more than 80% of the increase in final demand services price increases came from autos and auto parts, which increased 8.9%.
The Labor Department is expected to release the Consumer Price Index later this week. CNBC reports that the figures are expected to show a 0.6% month-over-month gain in prices for all goods and a 5.9% year-over-year increase. The Federal Reserve has attributed the rise to “supply chain shocks tied to the coronavirus pandemic,” and officials believe the increases will dissipate gradually and inflation will return to the bank’s target of 2% annually.
The figures come as American consumers continue to be hammered by inflation. The Daily Wire reports that gas prices have risen by $1.25 since October 2020. Energy Secretary Jennifer Granholm told CNN’s Dana Bash in an interview Sunday that she hopes prices at the pump won’t climb above $4. Energy prices for home heating are expected to spike as cold weather sets in. In the same interview, Granholm told Bash that she expects Americans to pay more to heat their homes this year. “It will be more expensive this year than last year,” Granholm said.
Moreover, with Thanksgiving and Christmas fast approaching, consumers are looking at the most expensive meal ever. As reported by The Daily Wire, supply shortages and increased production costs have driven up prices of everything from aluminum foil to turkey to dinner rolls and cranberry sauce. The situation is made worse by the fact that Americans’ real wages are continuing to decline as wage growth continues to be outpaced by inflation.
The Biden administration responded to inflation concerns Saturday. During remarks on the economy, President Biden blamed inflation on COVID-19 related issues and argued that his “Build Back Better” agenda would lower inflationary pressure.