Finance

Inflation stays hot as wholesale prices jump 11 percent in April

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A man walks by a grocery store in Brooklyn on March 10 in New York City. The price of gas, food, cars and other items has hit a 40 year high as inflation continues to rise in America.

Wholesale prices in April were up 11 percent on the year and 0.5 percent since last month, the Labor Department reported Thursday, as an overheated economy continues to suffer from inflation.

The jump in the annual producer price index (PPI), which measures the prices of goods and services that businesses pay to each other, was down just slightly from its spike in March of 11.5 percent, following a similarly shallow dip in the consumer price index (CPI) that came in on Wednesday.

Core wholesale inflation, which excludes food and energy commodities, moved up 0.6 percent in April after increasing 0.9 percent in March. For the 12 months ending in April, core wholesale inflation was up 6.9 percent.

Indices for energy rose 1.7 percent month-on-month and indices for food rose 1.5 percent. While the index for processed goods rose 2.2 percent in April, the index for unprocessed goods advanced 5.3 percent, showing continued stress on core commodities that has been rippling throughout the global economy.

While the CPI measures the inflation that consumers actually feel at home and at the pump, producer price index is a closer measure of the inflation experienced by businesses and retailers, which are affected more closely by the supply chain disruptions that economists say are the root cause of inflation.

Wall Street had been expecting consumer prices to rise 8.1 percent, but they came in 0.2 points higher at 8.3 percent, helping to continue a sell off in equity markets that started last week.

“The April CPI data came in well above our expectations,” Deutsche Bank said in a note to investors, “with headline and core CPI posting monthly gains of 0.3 percent and 0.6 percent respectively. Year-over-year inflation rates fell as base effects from the surge in used car prices from last year began to roll off.”

“There are many contributors to the exceptionally high inflation that we’re experiencing,” Treasury Secretary Janet Yellen told the House Financial Services Committee Thursday morning, adding that the Treasury Department is in the process of trying to unblock supply chains.

Republican lawmakers seemed less than reassured.

“The moms in my district can’t afford baby formula, OK?” Rep. Ann Wagner (R-Mo.) said to Yellen. “They can’t afford to fill up their cars’ gas. We’re in a serious situation.”

Updated at 10:50 a.m.

Tags Consumer Price Index inflation Inflation Janet Yellen producer price index producer price index wholesale prices

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