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The United States Department of Labor announced that producer prices in the country increased notably in October, driven by the Increased costs of the retail sale of gasoline and motor vehicles .
This may mean that inflation could persist for a longer period amid pandemic-related supply chain problems. The Producer Price Index (PPI) rose 0.6% last month after gaining 0.5% in September, the federal agency reported.
In the months prior to October this year, the PPI increased by 6.2% after a similar gain in September , this represents the highest figure since 1990. According to Reuters, some economists expected an increase in the PPI of 0.6% monthly and 6.7% year-on-year.
Ryan Sweet, senior economist at Moody’s Analytics, argued that the acceleration in US inflation could be expected to dissipate “quickly as I was thinking, particularly for companies due to global supply chain problems. ”
The representative of Moody’s Analytics stated that“ High inflation is increasing pressure on the Federal Reserve , but they have shown no signs of abating as they will bear inflation higher for the labor market to return to full employment quickly. ”
Trends indicate that more than 60% of the increase in PPI last month was due to a rise of 1.2% in the prices of goods , which followed a 1.3% advance in September. The 6.7% increase in gasoline prices represented a third of the rise in goods prices.
In addition, according to the Department of Work, there were increases in the values of diesel, gas and jet fuel, as well as in plastic resins. Wholesale food prices fell 0.1% while the cost of meat plummeted by 10 .3%.
On the other hand, the prices of cars, especially light-engine vans, fell after a change in the composition of the sector . Services rose 0.2% last month following a similar advance in September.
An 8.9% rebound in retail margins for automobiles and spare parts accounted for more than 80% of the increase in services . The cost of transportation and storage services increased 1.7% .
There were also gains in wholesale prices of clothing, footwear, transportation of truck loading, retail sale of food and alcoholic beverages, hospital outpatient care, as well as machinery, spare parts and supplies for equipment. But portfolio management fees fell.
Excluding the volatile components of food, energy and commercial services, producer prices rose 0.4 percent hundred. The so-called underlying PPI gained 0.1% in September. In the 12 months to October, the underlying PPI accumulated a rise of 6.2%, after an advance of 5.9% to September.
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