Another important inflation indicator has reached record highs, As the rise in New York (CNN Business) epidemic prices persists, key inflation indicators have risen to record highs in 2021.
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Another important inflation indicator has reached record highs |
The US Producer Price Index, which tracks the average amount US producers pay for goods and services, rose 9.7% last year without adjusting for seasonal changes. According to the Bureau of Labor Statistics, this was the largest calendar year increase since the data series began in 2010.
This was a slightly smaller advance than economists expected, but an increase from the 9.6% recorded in the 12 months to November.
Excluding food, fuel and trade service prices, which measure changes in margins earned by wholesalers and retailers, the inflation index rose 6.9% last year compared to a 1.3% rise in 2020.
In December alone, PPI data followed the same pattern as the consumer price index released on Tuesday. Prices rose in December, but at a much slower pace than the previous month.
Jennifer Lee, senior economist at BMO, wrote in a note to customers: "It wasn't as bad as many expected. US producer inflation is the slowest growth since November 2020. It rose 0.2% in December. " "And given that the average monthly growth rate for the last 12 months was 0.8%, 0.2% is good news."
What got higher?
More than half of service price increases are due to commercial service price increases.
Fuel and lubricant prices are rising, and wholesale sales of air passenger services, food retail, equipment and vehicles are also increasing.
Overall, the commodity price index actually fell in December, marking the first decline since April 2020, when economic data showed the worst epidemics. In particular, fuel and food prices are falling.
PPI tracks the prices of products and services sold to end consumers, as well as the products, services, maintenance and repairs of the construction business that manufactures their finished products.
Conversely, equipment and maintenance costs fell in December. The Processed Products Index recorded its first decline since April 2020, while the Raw Products Index recorded its first decline after eight consecutive months of growth.
This reduces the high cost burden on the end user, at least for the foreseeable future. Meanwhile, intermediate demand for services has risen 0.8%, the biggest advance since June.
Will inflation continue to rise?
Inflation can continue to rise, at least in the short term.
"Things are still much hotter than a year ago," Lee said.
Economists predict a slight slowdown in inflation, but it will take time to filter the 12-month inflation aggregate.
"This sets the tone for what to expect from inflation in 2022. Prices for energy, food, used cars, etc. will rise the most in 2021 and will rise or fall sharply," PNC said. Bill Adams, Senior Economist, said. "At the same time, inflation will spread to prices in other segments. Companies that increased labor and equipment costs in 2021 could outpace those high costs in 2022 as final demand remains strong. . "
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