Good morning! It's Hira with your daily morning digest.
After yesterday's report on consumer inflation showed prices rising at the fastest annual rate in four decades, another report out this morning from the Bureau of Labor Statistics (BLS) showed inflation surged at a record rate for those producing goods too. The latest Producer Price Index (PPI), which measures inflation for manufacturers, rose 1.4% in March, up from a 0.9% rise in February. Compared to a year ago, prices rose 11.2%—the largest annual increase on record since the BLS began tracking the data in 2010.
Soaring costs of energy prices accounted for more than half of the rise in producer prices over the past year, according to the report. Transportation and warehousing costs were the second highest contributor, as Russia's invasion of Ukraine and recent lockdowns in China exacerbated supply chain issues. The core PPI rate, which excludes volatile food, energy, and trade costs, rose 0.9% in March and 7% from last year.
The higher prices producers and manufacturers pay are considered a leading indicator because they are often passed on to consumers in the form of higher prices for final goods that reflect the higher production costs businesses face. And while some economists say consumer inflation may have peaked in March, producers are likely to keep prices high to cope.
Most small businesses are already raising prices, with a record 72% of small business owners saying they're planning to boost selling prices, according to the latest Small Business Optimism Index survey from the National Federation of Independent Business (NFIB). Thirty-one percent of owners surveyed reported that inflation was the biggest problem for their business, the largest share of respondents to say so since the first quarter of 1981.
"With inflation, an ongoing staffing shortage, and supply chain disruptions, small business owners remain pessimistic about their future business conditions," NFIB Chief Economist Bill Dunkelberg said in Tuesday's release.
- Hira
0 Response to "Inflation Is Rising, But Is It The Peak?"
Post a Comment