Prices charged by producers rose at a slightly slower rate in September despite supply chain snarls and shortages that have driven up manufacturing and shipping costs.
The producer price index (PPI) for final demand, which tracks prices charged for goods and services that are not components of other products, rose 0.5 percent last month, according to data released Thursday by the Labor Department. The PPI for final demand without food, energy or trade services prices, known as core PPI, was up 0.1 percent.
Economists expected the PPI for final demand to rise by 0.6 percent after increases of 0.7 percent in August and 1 percent in July and for core PPI to rise by 0.5 percent.
Almost 80 percent of the total increase in producer prices came from a 1.3 percent monthly jump in the cost of final demand goods — products purchased by retailers or wholesalers to be sold to consumers and businesses. Half of the jump came from energy prices alone, which rose sharply in September.
“The report offers signs that producer price increases are moderating despite worsening supply-chain challenges and broad shortages ranging from commodity inputs to labor,” wrote Mahir Rasheed of Oxford Economics.
While the rate of producer price growth declined in last month, prices for final demand goods and services increased 8.6 percent in the 12 months leading into September on an unadjusted basis, the highest annual increase since the Labor Department began calculating annual PPI growth in November 2010.
President BidenJoe BidenMcAuliffe holds slim lead over Youngkin in Fox News poll Biden signs bill to raise debt ceiling On The Money — Progressives play hard ball on Biden budget plan MORE and administration officials are scrambling to clear up overloaded supply lines, unclog backlogged ports and draw in thousands of workers needed to overcome shortages and high costs driven by the coronavirus pandemic. While inflation had increased earlier this year, mainly in goods and services once shut down by the pandemic, price increases for food, shelter and other staples have accelerated after the delta variant upended the global economy.
Even though the U.S. is one of several wealthy nations struggling through supply shortages and high inflation, Republican lawmakers have blamed the snarls on Biden’s $1.9 trillion March stimulus bill and the carry-over impact of federal jobless aid that lapsed Sept. 6.
Economists largely agree that robust stimulus helped fuel some of the challenges but blame the persistence of shortages and inflation on pandemic-related factors seen across the world.