LONDON (Al-Jazeerza) - The
inflationary trend in the United States is still very much alive and well.
The Producer Price Index (PPI) – which measures prices that businesses receive for their goods and services – surged 8.6 percent in September from the same period a year ago. That’s the biggest jump on records dating back to 2010.
But the annualized rate of wholesale inflation measures current prices against an economy still very much struggling in September 2020.
On a month-over-month basis, producer prices rose only 0.5 percent in September. That was lower than many were expecting and the lowest month-over-month increase this year.
Helping to keep a lid on the PPI headline number were prices for services, which increased just 0.2 percent in September from the month before. That, too, marked the slowest monthly gain this year.
A big contraction in prices for airline travel amid a surge in the Delta variant of COVID-19 helped keep a lid on services prices last month.
Meanwhile, the big driver of the jump in wholesale inflation last month was energy prices, which are currently on an upward tear, thanks to global shortages of oil, natural gas, and coal.
U.S. final demand for energy in September rose 2.8 percent – which accounted for a full 40 percent of the broad-based advance in producer prices.
On a more granular level, prices of gasoline (petrol) rose 3.9 percent last month.
Strip out volatile food and energy, and so-called “core” producer prices increased just 0.2 percent in September from the previous month – the smallest jump this year.
When goods producers and service providers are faced with higher prices, they often pass those costs on to consumers. On Wednesday, the U.S. Department of Labor reported that consumer prices rose 0.4 percent in September from the month before and 5.4 percent over the past 12 months – matching a 13 year high in annualized inflation hit in June and July.