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Wholesale Prices Rise Almost 11%, Setting Records

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:

Pretty much:

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Comments

Nope, nothing to see here, move along….to Ukraine and Putin’s price hike. /s

The Gentle Grizzly | June 14, 2022 at 5:17 pm

Is Biden worse than Carter yet?

People will get angry soon enough to start running out of grocery stores with stolen food products. It will happen.

They have given up on incrementally destroying the country. Trumps election has scared them into accelerating…

    JohnSmith100 in reply to slagothar. | June 14, 2022 at 6:26 pm

    Trump’s election caused them to expose themselves, making it easier to bring them justice.

      slagothar in reply to JohnSmith100. | June 14, 2022 at 6:50 pm

      Let me know when they bring the first one to justice….

      The Gentle Grizzly in reply to JohnSmith100. | June 14, 2022 at 6:58 pm

      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.

      healthguyfsu in reply to Pasadena Phil. | June 14, 2022 at 9:52 pm

      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!

      Whitewall in reply to Pasadena Phil. | June 14, 2022 at 10:21 pm

      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%.

    JohnSmith100 in reply to SHV. | June 14, 2022 at 7:24 pm

    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.

    jb4 in reply to SHV. | June 14, 2022 at 10:49 pm

    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?

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