Producer prices increased by nearly 10% for the year ending in December, the highest rate of growth since the Labor Department began keeping records.
The producer price index measures the average change over time in selling prices received by domestic producers of goods and services. The 9.7% increase is the highest increase since it first started being measured more than a decade ago.
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var _bp = _bp||[]; _bp.push({ "div": "Brid_42088324", "obj": {"id":"27789","width":"16","height":"9","video":"938458"} }); ","_id":"0000017e-5417-df8e-ab7f-75bf56370000","_type":"2f5a8339-a89a-3738-9cd2-3ddf0c8da574"}”>Video EmbedProducer prices were specifically up 0.2% for the month of December. Prices had previously risen by 1% in November.
“This sets the tone for what to expect from inflation in 2022: The prices that surged the most in 2021, like energy, food, and used cars, will increase much more slowly or even decline,” PNC senior economist Bill Adams said. “At the same time, inflation will broaden across other categories of prices — businesses that saw their costs of labor and materials increase in 2021 are going to pass those higher costs on in 2022 as end demand stays robust.”
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The Thursday report adds to worries about inflation in the United States, a development that has damaged President Joe Biden’s approval ratings and clouded prospects for ambitious Democratic legislation to enact new spending programs and raise taxes. Consumer prices increased 7% in the 12 months ending in November, the fastest clip since 1982, according to a report released by the Bureau of Labor Statistics on Wednesday.
The persistent inflation has led the Federal Reserve to gear up to raise interest rates this year for the first time since 2018. This year could see several interest rate hikes, the first of which might occur in March.
Also Thursday, the number of new applications for unemployment benefits climbed 23,000 last week to 230,000 — more than anticipated and a discouraging sign for the recovery. Still, jobless claims have been on a downward trajectory throughout the last year.
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The omicron variant of COVID-19 has been rising across the country, with new cases, hospitalizations, and deaths rising significantly over the past several weeks. The new surge is raising concerns that it could cut into the country’s economic recovery.
