Rising Wholesale Prices Indicate Growing Inflation
In 2021, the prices of wholesale products rose by 9.7%, reflecting the highest consumer inflation in the last 40 years, as announced by the Labor Department on Thursday, January 13.
This near-10% growth represents “the largest calendar-year increase since data were first calculated in 2010,” the Bureau of Labor Statistics stated.
On the plus side, the producer price index (PPI) - a number marking the height of producer prices for goods and services - increased “just” 0.2% in December, though the estimation was 0.4%.
Another signifier of economic instability is the number of weekly claims for unemployment insurance. The first week of January has seen a significant surge, with a total of 230,000 cases. These figures are well above the expected 200,000 and much higher than the previous week’s 207,000.
However, in the long term, continued jobless claims fell by 194,000 to 1.56 million - the lowest level since June 1973 - as stated in a separate document by the Labor Department on Thursday. In other words, the current issues are better reflected by inflation than joblessness.
Wholesale markets (online or offline) are not the only ones affected, of course. The PPI figures show that the demand prices for energy fell by 3.3% and 0.6% for food. On the other hand, trade and warehousing demand costs hopped up by 0.8% and 1.7%, respectively.
Goods and services showed opposing trends: While goods prices went down by 0.4%, services offset that reprieve by rising 0.5%.
Experts in the field agree that the future brings a tightening of the budget in 2022, while the increase in initial jobless claims is likely not the start of a trend.
No matter the predictions, the US labor market is still going through rough patches, with the total number of unemployed citizens back to its pre-pandemic level. While this is optimistic, it still leaves around 6.3 million people without jobs.
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