Mon. Dec 6th, 2021

Prices continued to rise for US businesses in October, as inflation showed little sign of declining.

Prices continue to rise in the United States with October setting another record for wholesale inflation in the world’s largest economy.

The producer price index, which measures the prices that businesses fetch for the goods and services they sell, rose 8.6 percent in October from the same period a year ago, the U.S. Department of Labor said Tuesday.

This rate corresponds to September, which was the highest on records dating from 2010.

On a monthly basis, producer prices rose 0.6 percent in October.

After years of subdued inflation, prices rose in the US and around the world as economies rejected COVID-19 restrictions, causing supply shortages and bottlenecks.

In addition to raw material shortages, U.S. businesses are also struggling with near-record jobs and not enough workers to fill them.

To attract scarce job seekers, many firms have chosen to increase wages and increase benefits. Those costs, coupled with more expensive inputs, are increasingly being passed on to consumers who find that their dollars are not stretching that far these days.

Inflation is also consumer outlook blurs on the economy. The latest monthly survey of consumer expectations by the Federal Reserve Bank of New York showed that Americans’ median inflation expectations for the coming year have reached an all-time high, while their perceptions about current and short-term household finances are deteriorating.

More than 60 percent of October’s jump in producer prices was due to a 1.2 percent rise in commodity prices, mostly driven by higher energy prices.

Pain was particularly acute at the pumps, with petrol prices rising by 6.7 per cent in October.

The world is experiencing an energy crisis that has pushed up prices for natural gas, petrol, coal, oil and other fossil fuels – just as winter unfolds in the northern hemisphere.

The US Energy Information Administration warned that Americans this winter are looking at their highest energy bills in years to stay warm.

One area where businesses saw inflation decline slightly in October was food, with prices falling 0.1 percent from the previous month.

Syrup food and energy, and the so-called “core” producer price index was 6.2 percent higher in October than the same period a year ago, and 0.4 percent higher than the previous month.

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