Wholesale Prices Rise Record 9.6% in 2021
A rapid increase in wholesale prices in November is the latest sign of the pressure on the economy caused by inflation, reported the Labor Department on November 14.
The Producer Price Index for final demand jumped 9.6% during the year, after increasing 0.8% in November. This is the most significant gain since November 2010, when the index for final demand was first calculated.
Energy and trade prices increased 0.7%, raising core PPI to 6.9% - one of the most significant gains recorded so far. Estimates for the year-over-year increase were at 7.2% and gains for November at 0.4%, meaning that monthly growth was faster and yearly growth slower than expected. The data by the Labor Department for core PPI dates back to August 2014.
PPI for processed goods for intermediate demand has soared 26.5% compared to November 2020. This is the fastest year-on-year increase since January 1975, and these numbers describing rising consumer prices reflect the highest inflation in the last 30 years.
One of the most significant drivers for the price of goods is the increasing demand. The month-to-month trend continues from a 1.3% increase in October and 1.2% in November.
The stock index prices climbed following the announcement from the Federal Reserve yesterday, hinting it would raise interest rates in 2022 to fight back inflation.
Officials have long insisted that the situation was caused by the COVID-19 pandemic and that it would pass. Fed Chair Jerome Powell has recently pointed out that rhetoric is no longer applicable and will not be used in future communication from the central bank.
The supply chain bottlenecks and rising demand for goods were primary factors driving the inflation.
Rising demand for goods might well be the needed push for anyone looking to start their business with imported goods from wholesale websites.
Julia A. is a writer at SmallBizGenius.net. With experience in both finance and marketing industries, she enjoys staying up to date with the current economic affairs and writing opinion pieces on the state of small businesses in America. As an avid reader, she spends most of her time poring over history books, fantasy novels, and old classics. Tech, finance, and marketing are her passions, and she’s a frequent contributor at various small business blogs.
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