The U.S. Bureau of Labor Statistics released their Producer Price Index (PPI) for the month of September, and it showed that inflation on the wholesale level rose 0.5%. Year over year it increased to a new record high of 8.6% which is up from the last report of 8.3%.
Core PPI, which measures wholesale inflation minus food and energy prices, rose 0.2% in September and to 6.8% for the annual number which is up from 6.6%.
Even though this is a measure of wholesale inflation, it is continuing to move higher and can most certainly lead to higher consumer levels of inflation if producers choose to pass the higher costs to their consumers.
The Bureau of Economic Analysis released their Personal Consumption Expenditures report (PCE) which was for the month of August and it showed that inflation on the consumer level was up 0.4%, which was slightly higher than expectations. Year over year, the index rose from 4.2% to 4.3% which is the highest inflation reading in thirty years!
Core PCE, which measures consumer inflation minus food and energy prices and is the main focus of the Federal Reserve, rose 0.3% in August and remained stable at 3.6% for the annual number.
Even though the Fed has been saying that inflation has been “transitory” or temporary, it is hard not to feel it and see it all around us in both of these reports, the PPI and PCE are showing it. Let’s hope inflation starts to tame because higher levels of continued inflation can impact interest rates negatively.