The US producer prices rose solidly in October, driven by rising gasoline and motor vehicle retail costs, suggesting that high inflation could persist for a time amid pandemic-related supply chain problems.
The Producer Price Index for final demand rose 0.6% last month after gaining 0.5% in September, the Labor Department said Tuesday. In the 12 months to October, the IPP increased 8.6% after a similar gain in September. Economists consulted by Reuters expected an increase in the PPI of 0.6% monthly and 8.7% year-on-year.
“The acceleration in US inflation may not fade as quickly as previously thought, particularly for businesses due to global supply chain problems,” said Ryan Sweet, senior economist at Moody’s Analytics in West Chester, Pennsylvania.
“The elevated inflation Pressure is mounting on the Federal Reserve, but they have shown no signs of abating as they will bear higher inflation to bring the job market back to full employment quickly. “
More than 60% of the increase in the PPI last month was due to a 1.2% rise in the prices of goods, which followed a 1.3% increase in September. The 6.7% rise in the gasoline prices accounted for a third of the increase in the prices of goods. There were increases in the values of diesel, gas and jet fuel, as well as plastic resins.
Wholesale food prices fell 0.1% while the cost of beef plummeted 10.3 percent. Prices for light-duty trucks fell following a change in the composition of the sector.
Services rose 0.2% last month after a similar advance in September. An 8.9% rebound in auto and parts retail margins accounted for more than 80% of the rise in services. The cost of transportation and storage services increased 1.7 percent.
Gains were also recorded in the Wholesale prices clothing, footwear, trucking, retail sale of food and alcoholic beverages, hospital outpatient care, as well as machinery, spare parts and supplies for equipment. But portfolio management fees fell.
Excluding the volatile components of food, energy and commercial services, producer prices rose 0.4 percent. The so-called IPP underlying gained 0.1% in September. In the 12 months to October, the underlying PPI accumulated an increase of 6.2%, after the increase of 5.9% to September.