Consumer prices rose 8.6 percent last year induced by skyrocketing energy tariffs that are further hampering supply chains caused by understaffing due to stiff COVID-19 regulations and soaring sick leaves.
The US Bureau of Labor and Statistics, in its Producer Price Index News Release summary, reported, “the final demand index rose 8.6 percent for the 12 months ended in September, the largest advance since 12-month data were first calculated in November 2010.”
The indexes for food and shelter also increased in September, contributing more than half of the “monthly all items seasonally adjusted increase,” the Labor Department said.
According to the agency, the energy index increased 1.3 percent last month, the gasoline index rose 1.2 percent, the index for food rose 0.9 percent, and the index for food at home rose 1.2 percent.
“The index for all items less food and energy rose 0.2 percent in September, after increasing 0.1 percent in August,” the department’s report said. “Along with the index for shelter, the indexes for new vehicles, household furnishings and operations, and motor vehicle insurance also rose in September. The indexes for airline fares, apparel, and used cars and trucks all declined over the month.”
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A shortage in energy, raw materials, and human resources in combination with strained supply chains have fanned the production costs of many consumer goods producers, which in turn levers consumers’ prices.
The Federal Reserve expressed similar concerns about hyperinflation that appeared to be of a permanent character. In the minutes of its latest Sept. 21-22 policy meeting released on Wednesday, certain central bank officials “expressed concerns that elevated rates of inflation could feed through into longer-term inflation expectations of households.”
“Inflation is no longer ‘transitory,'” said Sung Won Sohn, professor of finance and economics at Loyola Marymount University in Los Angeles. “Supply-chain bottlenecks are getting worse. The logjam is unlikely to ease anytime soon despite the latest intervention by the White House.”
Meanwhile, the Biden administration is plagued by criticism by both Democrats and Republicans who blame the administration’s policies for the current financial crisis.
President Joe Biden tried to ease concerns about slowing down supply chains at ports in Los Angeles and Long Beach, California, during his White House briefing on Wednesday, noting 40 percent of the nation’s shipping containers entering the United States pass through one of these two ports.
“After weeks of negotiation and working with my team and with the major union and retailers and freight movers, the Port of Los Angeles announced today that it’s going to begin operating 24 hours a day, seven days a week,” Biden announced.
“Additionally, FedEx and UPS, two of our nation’s biggest freight movers, are committing today to significantly increase the number of goods they are moving at night. FedEx and UPS are the shippers for some of our nation’s largest stores, but they also ship for tens of thousands of small businesses all across America,” he added.