Bidenflation: Producer Prices Soar at Record 8.6% Pace

President Joe Biden speaks during an event on clean cars and trucks, on the South Lawn of the White House, Thursday, Aug. 5, 2021, in Washington. (AP Photo/Evan Vucci)
AP Photo/Evan Vucci

Prices rose 8.6 percent from a year ago in October, the second consecutive month of the fastest annual pace of inflation in records going back 10 years.

The Department of Labor said the Producer Price Index accelerated to show a monthly gain of 0.6 percent, up one-tenth of a percentage point from the September gain. That was in line with analyst expectations.

Excluding the volatile categories of food and energy, producer prices for final demand were up 0.4 percent compared with the prior month, twice the pace of the September gain, and 6.8 percent compared with a year earlier.

Excluding food, energy, and trade services, the Producer Price Index rose 0.4 percent on a monthly basis, up from 0.1 percent. Compared with a year ago, prices were up 6.2 percent.  Trade services measure the margins of sellers rather than prices.

The Producer Price Index is a measure of inflation compiled monthly by the Department of Labor. It measures prices from the point of view of sellers rather than buyers, the perspective measured by the Consumer Price Index. The headline numbers are gauges of goods and services sold for “final demand,” meaning they are sold to their end user. The PPI also tracks goods further out in the supply chain, which the government describes as “intermediate demand.”

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. The index for final demand services moved up 0.2 percent, and prices for final demand construction advanced 6.6 percent.

Within intermediate demand in October, prices for processed goods moved up 2.1 percent for the month, the index for unprocessed goods increased 8.4 percent, and prices for services rose 0.2 percent. Compared with 12-months ago, intermediate prices for processed goods were up 25.4 percent. Prices for unprocessed goods were up 56.6 percent percent compared with a year ago.

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