Wholesale inflation in the United States rose 11 percent in April from a year earlier, a significant gain that indicates that higher inflation will continue to drag consumers and businesses down in the coming months.
The Labor Department said Thursday that its producer price index – which measures inflation before it reaches consumers – rose 0.5 percent in April from March. However, this is a slowdown from the previous month when it jumped 1.6 percent.
The 11 percent annual increase in April is down slightly from the annual gain of 11.5 percent in March, which was the largest increase since records began in 2010.
However, the April number represented a painfully large increase, and stock index futures traded lower on Wednesday as inflation fears continued to weigh on Wall Street.
US wholesale inflation rose 11% in April from a year earlier, down slightly from March but still near record highs.
Wholesale grain prices are up 41.3% from a year ago as the Russian war in Ukraine sent global prices soaring. Pictured: Rice being harvested in Mississippi in a file photo
Thursday’s report showed a broad rise in the cost of food at the wholesale level, with grain up 41.3 percent from a year ago as Russia’s war in Ukraine sent global prices soaring. Russia and Ukraine are major grain producers.
The cost of eggs rose 161.3 percent, driven by the bird flu outbreak that killed 10 percent of chickens in the United States. Processed young chickens are up 24.1% year-over-year.
The prices of fresh vegetables increased by 45.7 percent and fresh fruits by 17.3 percent.
Producer price data captures inflation at an early stage in production and can sometimes indicate in which direction consumer prices are headed.
It also feeds into the Fed’s preferred measure of inflation, the personal consumption expenditures price index.
Thursday’s numbers came just a day after the government released consumer price data for April, which showed inflation jumped 8.3% last month compared to a year ago.
This increase was down slightly from March’s four-decade high of 8.5 percent. On a monthly basis, inflation rose 0.3% in April from March, the smallest increase in eight months.
However, there was plenty of evidence in the consumer price report that inflation will remain stubbornly high, and is likely to continue this year into 2023.
Rents have risen faster as many apartment buildings have raised monthly payments for new tenants.
Consumer price data for April showed that inflation jumped 8.3% last month compared to a year ago
Airline prices jumped the most in records dating back to 1963. Food prices continued to rise sharply.
Over the past year, grocery prices rose 10.8 percent, the largest annual increase since 1980. Food prices outside the home rose 7.2 percent year-over-year.
The cost of a gallon of gas fell 6.1 percent in April, but is still about 44 percent higher than last year.
And so far in May, pump gas prices are back up. Nationwide, the average price for a gallon of gas hit a record high of $4.40 on Wednesday, according to AAA.
The high price of oil is the main factor. A barrel of benchmark US crude oil sold for nearly $100 a barrel on Tuesday. Gas fell to around $4.10 a gallon in April, after hitting a previous record high of $4.32 in March.
President Joe Biden in a statement touted the drop in the “headline” annual inflation figure — which appears to be falling mostly because prices started rising a year ago, making the baseline higher.
The US inflation rate has fallen slightly from the four-decade high it hit in March
“While it is encouraging to see that annual inflation moderated in April, the fact remains that inflation is unacceptably high,” Biden said. “As I said yesterday, inflation is challenging for families across the country and bringing it down is my top economic priority.”
Biden has blamed chronic supply chain crises related to the rapid economic recovery from the pandemic, as well as Russia’s invasion of Ukraine, for sparking inflation.
He said his administration would help mitigate price hikes by reducing the government budget deficit and boosting competition in industries, such as meatpacking, that are dominated by a few industry giants.
Republicans argue that Biden’s $1.9 trillion spending package last March increased economic activity by flooding it with stimulus checks, boosting unemployment aid and child tax credit payments.
“Inflation is out of control with another record gas price hitting today, yet Biden continues to lie to Americans and refuses to take responsibility for his failed agenda,” Republican National Committee Chair Ronna McDaniel said in a statement responding to the latest report.
She added that the reckless spending of Biden and the Democrats created the highest inflation in 40 years, and Americans are paying the price. “The skyrocketing prices, the Biden gas hike, and the deteriorating economy are all on the ballot in November, and voters know that Biden and the Democrats are in charge.”
