Wholesale prices have reached their highest annual rates in 27 years, according to a report released Tuesday by the government, leaving many worrying about increasing inflation.
The Annual Producer Price Index (PPI), which measures the price of finished goods, rose 9.8 percent in the 12 months that ended in July. That represents the fastest rise in the PPI since a 10.4 percent increase in June 1981.
For the month, PPI rose 1.2 percent, double the 0.6 percent analysts had expect for July.
The core PPI, which excludes food and energy prices, rose 0.7 percent, drastically outpacing the 0.2 percent increase expected. For the year core PPI is up 3.5 percent.
After a 4.9 percent increase in May and a 6.0 percent increase in June, energy prices rose at a relatively modest rate of 3.1 percent in July. For the 12 months through July energy prices have rose a total of 28 percent. With oil prices on the decline the recent increase in energy prices can be attributed to the cost of natural gas and diesel fuel.
Food prices, which have increased 8.7 percent in the year-over-year measurement, saw only a 0.3 percent increase in July after a 1.5 percent increase in June and 0.5 percent in May.
The Federal Reserve has cautioned that the outlook for prices in the near future remain “highly uncertain.”
Source CNNMoney.com:
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In another indication of growing inflation, wholesale prices increased in July to the highest annual rate in 27 years, according to a government report released on Tuesday. The annual Producer Price Index for finished goods rose 9.8% in the 12 months that ended in July. The jump in wholesale prices is the fastest rate of increase since a 10.4% bump-up in June 1981, according to Joseph Kowal, economist at the U.S. Bureau of Labor Statistics. |