WASHINGTON (AP) — Prices at the wholesale level surged by a record 9.6% in November from a year earlier, an indication of on-going inflation pressures
The Labor Department said Tuesday that its producer price index, which measures inflation before it reaches consumers, rose 0.8% in November after a 0.6% monthly gain in October. It was the highest monthly reading in four months.
Food prices, which had fallen 0.3% in October, jumped 1.2% in November. Energy prices rose 2.6% after a 5.3% percent rise October.
The 12-month increase in wholesale inflation set a new record, surpassing the old records for 12-month increases of 8.6% set in both September and October. The records on wholesale prices go back to 2010.
Core inflation at the wholesale level, which excludes volatile food and energy, rose 0.8% in November with core prices were up 9.5% over the past 12 months.
The increase in wholesale prices was widespread, led by a 1.2% increase in the cost of goods and a 0.7% rise in the price of services.
In the goods category, the price of iron and steel scrap rose 10.7% while the price for gasoline, jet fuel and industrial chemicals all moved higher. In the food category, the price of fresh fruits and vegetables rose while the price of chickens fell.
The surge in wholesale prices followed news Friday that consumer prices shot up 6.8% for the 12 months ending in November, the biggest increase in 39 years, as the price of energy, food and many other items shot up.
The Federal Reserve, holding its last meeting of the year this week, is expected to announce Wednesday that it will accelerate the pace at which it reduces its monthly bond purchases, preparing the way to begin raising its key benchmark interest rate, possibly by mid-2022 as it seeks to demonstrate its resolve to bring inflation under control.
Mahir Rasheed, a senior economist at Oxford Economics, said he expected wholesale price pressures will peak in the current quarter but he cautioned that this forecast may turn out to be too optimistic given snarled supply chains.
“Persistent supply headwinds will keep input and transportation costs sticky and only allow for a gradual moderation in price pressures,” he said in a research not.