By PAUL WISEMAN Economics Writer AP
WASHINGTON (AP) – Wholesale inflation climbed 8.3% last month from August 2020, the largest annual gain since the Department of Labor began calculating the number on 12 months in 2010.
The Labor Department said on Friday that its producer price index – which measures inflationary pressures before they reach consumers – rose 0.7% last month from July after rising 1 % in June and July.
Inflation has been choppy as the economy recovers from last year’s brief but intense coronavirus recession. Supply chain bottlenecks and labor shortages have pushed up prices. Federal Reserve Chairman Jerome Powell called the price spikes temporary and warned of the dangers of the central bank raising its benchmark interest rate prematurely (now close to zero), which could lock in the return of the economy.
“Since the pandemic, supply chains have never been the same and are unlikely to normalize for at least six months,” a report from Contingent Macro Advisors said. “” Only then will we (and, more importantly, the Fed) have a real idea of the trend rate of producer inflation. “
Excluding volatile food and energy prices, so-called “core” producer prices rose 0.6% from July and 6.7% from the previous year. Food prices rose 2.9% last month after falling in July. In the past year, wholesale food prices have climbed 12.7%, including increases of 59.2% for beef and 43.5% for shortening and cooking oil. Energy prices rose 0.4% from July and 32.3% from last year.