Inflation rises to 10% in producer index, highest on record

Washington Examiner – by Zachary Halaschak

Producer prices increased a blistering 10% for the year ending in February, according to a report Friday from the Bureau of Labor Statistics, the highest on record.

The inflation rate in Tuesday’s producer price index report was up 0.2 percentage points from the previous month and is the highest in the gauge’s 11-year history.

Tuesday’s news signals more pain to come for households. The producer price index gauges the wholesale prices of goods, which are eventually passed down to consumers.

The news came just days after a report for the month of February found consumer prices increased by 7.9% — the fastest annual rate in four decades. The high rate of inflation has damaged President Joe Biden politically and undercut support for his spending proposals.

“Inflation in the pipeline is showing few signs of decelerating in the near term, especially as the Russia-Ukraine war wreaks havoc in energy and other commodity markets,” economists with Oxford Economics said. “Higher input costs will keep producer prices frustratingly elevated and continue to squeeze profit margins, likely feeding higher consumer prices in the coming months until war tensions unwind and goods demand moderates.”

Tuesday’s reading clocks in a day before the Federal Reserve’s Federal Open Market Committee ends its two-day meeting and is expected to announce the first interest rate increases in years.

The central bank undertook unprecedented measures to ease monetary policy after the pandemic began more than two years ago. Those easy-money measures included slashing its interest rate target to zero and buying up massive amounts of government bonds.

Now, the central bank is trying to rein in inflation by reversing those policies. Some Fed watchers had predicted a rate hike of half a percentage point at the monetary policy committee’s March meeting rather than the typical raise of one-quarter of a percentage point.

It would have been the first time the Fed has taken such an extreme move in more than two decades, although Fed Chairman Jerome Powell hinted during recent congressional testimony that the hike will likely only be a quarter-point move right out of the gate.

Further complicating matters is the Russian war in Ukraine, which has sent gas prices shooting up to their highest level in U.S. history and added to inflation.

One thought on “Inflation rises to 10% in producer index, highest on record

  1. Sittin here just wonderin how the f*ck is a pack of cigs headed to $15!! An ounce of pure silver is only $24!!!!!!!!!!!!! FCK THIS GOV!!!!!!!!!!!

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