This morning’s update on wholesale prices brings more bad news on the inflation front. Producer prices jumped a seasonally adjusted 1.0% last month, elevating the 12-month pace to an eye-popping 7.7%–the highest since September 1981.
Higher energy prices are partially responsible for PPI’s ascent, but this is no longer solely about oil and gas prices, as today’s report reminds. A few examples from the Labor Department’s press release:
* The index for finished goods excluding foods and energy accelerated to 0.4 percent in January from 0.2 percent in December.
* The index for pharmaceutical preparations advanced 1.5 percent after increasing 0.4 percent in the prior month.
* Prices for light motor trucks and passenger cars turned up after falling in December.
* The Producer Price Index for Intermediate Materials, Supplies, and Components rose 1.4 percent in January following a 0.2-percent decrease in December. This upturn was broad based.