The Producer Price Index (PPI) hit its highest rate since 2022, the Bureau of Labor Statistics (BLS) reported Friday.
PPI, which measures the average change over time in the selling prices of domestic producers, rose to its highest rate since November 2022, CNBC reported. The report suggests that inflation due to the Iran War and tariffs might entrench high prices for consumers in the long term.
PPI surged to 6.5% year over year, according to the BLS. This rate is the highest since annual PPI was at 7.4% in November 2022. While prices increased less than expected in October, rising 0.3% as opposed to the anticipated 0.4%, annual PPI remains inflated.
While the Consumer Price Index (CPI) is at 4% on the year, the higher PPI suggests that businesses could pass these production costs onto consumers, Chief Economist at Navy Federal Heather Long said in an X post.
This wave of inflation stems from more than just energy constraints. Annual PPI excluding food and energy is 5%, Long said.
PPI is well above the 2% target set by the Federal Reserve. The Federal Reserve’s next policy meeting is Dec. 8-9.
“We’ve been above 2% for almost six years, and while it sometimes [seems like] we were making progress, lately we’re not making any progress, and if anything, it’s going the wrong way,” Chicago Fed President Austan Goolsbee told CNBC.
Consumers are feeling financial pain, and midterm voters most worried about the economy swung 60 points to Democrats since 2024.
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