The Producer Price Index (PPI), which gauges the average fluctuation in selling prices received by domestic producers over time, rose by 9.6% in November from a year ago.
It is the fastest rate ever measured since the data was first collected in November of 2010 and the eighth consecutive month of producer price increases.
It represents a faster rate than the 9.2% predicted by economists and is a clear sign that inflation pressures are still an active concern.
CNBC blames “supply chain bottlenecks and surging demand” as the primary drivers of the inflation.
“Final demand energy prices jumped another 2.6% in November despite sliding crude prices, while food was up 1.2%. Transportation and warehousing increased 1.9%, while portfolio management spiked 2.9%,” they write.
Core producer prices – which take out food and energy – also increased at a record 7.7%. This comes after reports showed consumer inflation rose 6.8% in November – a 39-year high as consumer prices soar ever higher.
President Biden over the summer promised that inflation at the time was merely transitory, a notion these latest numbers suggest might be incorrect.
“I want to be clear: my administration understands that were we ever to experience unchecked inflation in the long term, that would pose a real challenge for our economy,” he said in July.
“While we’re confident that isn’t what we’re seeing today, we’re going to remain vigilant about any response that is needed.”
Federal Reserve Chairman Jerome Powell recently, perhaps seeing the writing on the wall, admitted inflation will rise and suggested the term “transitory” should be retired.
“We tend to use [the word transitory] to mean that it won’t leave a permanent mark in the form of higher inflation,” he said. “I think it’s probably a good time to retire that word and try to explain more clearly what we mean.”
Biden has additionally argued that Americans have more money in their pocket since he became President, something provably false but also undermined by the latest Producer Price Index numbers.
CNBC concludes that “inflation has taken away all the wage gains for workers and then some.”
In reality, real average hourly earnings decreased by 1.9% over the past year.
“Unfortunately for the 71% of households making less than $40,000 and experiencing financial hardship due to Biden’s hidden inflation tax, a change in the administration’s vocabulary is little solace,” Pigott said in a statement.
“Especially since Biden wants to double down on the same reckless agenda that will only make Bidenflation even worse.”
Administration officials have been pretty clear they don’t intend to take the inflation problem seriously.
White House Chief of Staff Ron Klain tweeted an article arguing that inflation is a “high-class problem.”
White House Press Secretary Jen Psaki insisted inflation isn’t going to be exacerbated by more government spending.
“No economist out there is projecting that this will have a negative impact on inflation,” Psaki replied when a reporter questioned “injecting another $1.57 trillion” of spending into the economy.
Economists have since predicted inflation will remain above 2% possibly over the next three years “as a result of rising wages and strong demand for goods and services.”
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