Wholesale Prices Rise Almost 11%, Setting Records
Doubling April’s price increase
If you work in any industry that relies on product, you have are well-versed with our self-inflicted shipping woes, rising cost of goods, the impossibility of getting what’s been ordered, outrageous freight, etc.
All of which help explain why wholesale price increase have hit new records.
From CNBC:
Wholesale prices rose at a brisk pace in May as inflation pressures mounted on the U.S. economy, the Bureau of Labor Statistics reported Tuesday.
The producer price index, a measure of the prices paid to producers of goods and services, rose 0.8% for the month and 10.8% over the past year. The monthly rise was in line with Dow Jones estimates and a doubling of the 0.4% pace in April.
Excluding food, energy and trade, so-called core PPI rose 0.5% on the month, slightly below the 0.6% estimate but an increase from the 0.4% reading in the previous month. On a year-over-year basis, the core measure was up 6.8%, matching April’s gain.
The two PPI measures remained near their historic highs — 11.5% for headline, and 7.1% for core, both hit in March.
The data is significant in that prices at the wholesale level feed through to consumer prices, which are running at their highest levels since December 1981. The consumer price index increased 8.6% annually in May, defying hopes that inflation had peaked in the spring.
Federal Reserve officials are watching the inflation numbers closely. Markets now expect the central bank to raise benchmark short-term borrowing rates by 75 basis points when their two-day meeting concludes Wednesday.
The Biden administration is hitting all kinds of new records, new, terrible records.
For reference:
Sustained high inflation is out of control. Wholesale prices have been rising at double digit rates for six consecutive months. As Americans face sticker shock at the gas station and grocery stores, tax hikes, which are eventually passed on to consumers, are not the answer. pic.twitter.com/0PpNwIUomp
— Senator Mike Crapo (@MikeCrapo) June 14, 2022
Pretty much:
When wholesale inflation surges 10.8%, the Stock Market loses 20% of its value in six months, and it costs the average American $100 to fill-up the gas tank… pic.twitter.com/ZEjvX004Hg
— The First (@TheFirstonTV) June 14, 2022
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Comments
Nope, nothing to see here, move along….to Ukraine and Putin’s price hike. /s
Is Biden worse than Carter yet?
Biden would have to alienate Israel and empower a terroristic Muslim state in Iran to catch up with Carter…. working on it.
guess you missed Afghanistan
Or the Palestineans? Dementia Joe has been pandering them a lot lately.
Far far worse, Biden is hands down the worse president during my life, maybe worse ever. Like his life, the whole administration is POS.
The only competition is James Buchanan who bungled his way into the Civil War.
Yep…. and when Biden bungles us into Global Thermonuclear War then he will be numero uno!! Either that or successfully destroys the US allowing the world to fall apart. Take your pick.
No hostages – yet.
People will get angry soon enough to start running out of grocery stores with stolen food products. It will happen.
This is where my nearly 2 year food supply comes in handy.
They’ve started stealing gas in my old neighborhood in California. Can food be far behind?
They have given up on incrementally destroying the country. Trumps election has scared them into accelerating…
Trump’s election caused them to expose themselves, making it easier to bring them justice.
Let me know when they bring the first one to justice….
Only if by “justice”, you mean the town square, various bits of chairs and tables for the impromptu judge and jury to use, ropes, and trees or lamp posts.
If by justice you mean the tyrants in black dresses, nothing will happen v
Prices ration short supplies. Lesson: don’t pay people to stay home instead of producing.
It would be permanent if the Fed accommodates the price increases by allowing wage increases, for then the prices would no longer reduce consumption at the new price level and the price would have to go up again to accomplish it.
It looks like the Fed is serious about it though. Recession rather than accommodation. You can’t raise wages because you’ll go out of business.
US2Y had a spectacular speculative yield jump Friday and Monday.
The best thing right now would be for the Fed to keep raising rates until the discount rate overtakes the inflation rate. This would shock the economy and more importantly, the politicians who just keep spending money without any accountability to fatten their own wallets. If they did that, we would have a shorter recession even though it would be very, very painful for a year or two. But we would come out of it with a real economy again.
This is what happens when banks and the government rig markets. There is no price discovery going on right now in the stock markets nor for gold (whose price is set by JP Morgan and Goldman Sachs). And the Fed had been managing interest rates until last week when the market reacted to the inflation numbers. The derigging of markets is very painful, especially when it has gone on this long, but the fact that it is happening is a good sign that we will survive.
Their expenditures are based on a failed concept you have probably heard of known as “Modern Monetary Theory”. I’m no economist, but my understanding of it is that progressive economists believe that you can print and spend and still not inflate as long as you tax back and remove money from the economy in that fashion. The BIG PROBLEM is that our government has NEVER in its ENTIRE history of taxation, failed to spend tax dollars.
How people think this will actually work in practice beyond the theoretical is baffling to me!
MMT is moments away from crashing the Japanese economy:
https://www.zerohedge.com/markets/giant-hedge-fund-goes-soros-bank-japan-bets-billions-japan-and-mmt-will-break
So much for printing money to lend to yourself. There was nothing modern about MMT. It was a recycling of the medieval practice of debasing the coinage with specie containing less and less gold and silver. People weren’t stupid then either. Gold and clam shells are not the same thing. That’s why gold replaced clam shells in the first place.
No doubt the late Paul Volcker is somewhere nodding his head in approval.
See comparisons of the Biden train wreck to the Carter train wreck. Having waited in gas lines and had a home mortgage with ~17% interest during the Carter years, I’d say Biden is much worsen and he’s just getting started.
Have also seen comparisons of Biden inflation to Carter inflation; what is rarely mentioned is that, IIRC, there was a major change in the methodology of how CPI is computed in 1986. Using CPI as was determined during Carter, current CPI inflation is >17%.
I had a land contract at that time for my first fixer upper house, 11%. It took me 7 years to remodel it and pay it off. Under 40 and debt free. I strongly advocate young people to approach early adult life this way.
I have been referring to your 1970’s inflation metric for some time. What I see is that real price increases more than 10 points above wage increase will slam the brakes on the economy very quickly, as in no later than Q3, perfect timing for the election. Consumer sentiment was recently reported at a record low. The plunging stock market further damages psychology.
This inflation is getting out of hand quickly, but the democrats are more worried about show trials than anything else. I was at the grocery store yesterday and a package of bacon is now over $10!!!! Ridiculous.
Joe, while you’re busy not taking responsibility for this problem, allow me to point out that your friends in the CCP have done their share of contributing to this disaster. Xi’s “dynamic COVID policy” has wreaked havoc on the global supply chain.
“Break Backs Better”….. All of the “good intentions” of the Left/Dem outweigh the suffering and destruction of the best economy in decades. These people need to be punished but by whom and for what under this collapsing country?
Except no one believes any of these people have good intentions.