Producer Prices See Biggest Annual Surge on Record, Stoking Consumer Inflation Concerns

Producer prices rose above expectations in July, marking their biggest 12-month increase on record and reinforcing broader concerns about inflation as higher production costs tend to filter down to consumers. According to a Labor Department release (pdf), for the 12 months ending in July, the producer price index (PPI) jumped by 7.8 percent, the highest number in the history of the series, which dates back to 2010. Economists polled by Investing.com were expecting a 7.3 percent rise in the PPI final demand measure. Producer prices excluding food, energy, and trade services—a gauge often preferred by economists because it excludes the most volatile components—rose 6.1 percent in July from a year earlier. This, too, was the biggest vault in that number since the Labor Department started tracking it in 2014. Final demand producer energy prices surged by a seasonally unadjusted 33.4 percent over the year in July, goods advanced 11.9 percent, and …

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