Inflation hits highest level in years as wholesale prices rise 8.6% in 12 months

Gas Pumps
Gas pumps in Gillette on July 20, 2021.

By Casey Harper, The Center Square

The costs of goods and services rose at above-normal rates again in October, as new federal economic data released Tuesday show inflation continuing to impact the U.S. economy.

The Bureau of Labor Statistics reported that the producer price index, a figure that measures wholesale prices, grew another 0.6% in October, after increasing 0.7% in August and 0.5% in September. Overall, the figures show that inflation has grown 8.6% in the past 12 months ending in October, tying a record set earlier this year.

That rise in inflation means everyday goods and services are more expensive for Americans. BLS said gasoline and food helped drive this latest increase.

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“One-third of the October advance in the index for final demand goods can be traced to prices for gasoline, which rose 6.7 percent,” BLS said. “The indexes for diesel fuel, fresh and dry vegetables, gas fuels, jet fuel, and plastic resins and materials also moved higher. In contrast, prices for beef and veal decreased 10.3 percent.”

Construction, in particular, became much more expensive.

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“Over 60 percent of the October increase in the index for final demand can be traced to a 1.2-percent rise in prices for final demand goods,” BLS said. “The index for final demand services moved up 0.2 percent, and prices for final demand construction advanced 6.6 percent.”

The Biden administration has said the inflation is only temporary, but many economists have said it could continue well into 2023. The report came just days after promising jobs data. The Department of Labor reported that in the month of October, payroll employment increased by 531,000, surpassing expectations.

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Republicans quickly laid the blame for the rising prices at the feet of President Joe Biden and pointed to inflation as a reason to stand up to Biden’s several trillion dollars in proposed new spending. Debt spending contributes to inflation since printed money helps fund federal debts.

“Democrats’ inflation crisis keeps getting worse,” said National Republican Congressional Committee spokesman Mike Berg. “If they go through with their plans to spend trillions of dollars on a reckless big government tax and spending spree, things will only get worse.”

 

The Center Square is a 501(c)(3) non-profit focused on state- and local-level government and economic reporting.