The Producer Price Index (PPI) shot up 1% in July, bringing the 12-month PPI average to the highest annual jump on record at 7.8%, according to data released by the Labor Department on Thursday.
The news follows up on data released earlier in the week that showed consumer inflation at 5.8% in July, well above the target set by the Federal Reserve Open Market Committee.
Back-to-back monthly increases in the PPI, which measures price pressures before they reach consumers, were the most sizeable since a 1.2% rise in January, the Labor Department reported.
More awful Inflation news out this morning as PPI (Producer Price Index) rises 7.8%, the highest rate in three decades.
The #BidenInflation spike decimates workers in America — and it’s getting worse… pic.twitter.com/O93Dm0w7gT
— Steve Cortes (@CortesSteve) August 12, 2021
“Price metrics continue to be impacted by pandemic-related effects including strong demand and supply constraints,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics. “The reopening impact should diminish over coming months but there is less certainty about supply dislocations, which could be exacerbated due to spread of the delta variant.”
The news will help feed fears that another round of inflationary pressure could hit consumers in the fall, after already suffering this summer.
Also at play is the nearly $5 trillion dollars in money injected into the economy by the government since the start of the pandemic, bringing the national money supply to over $20 trillion, fueling inflationary concerns.
Republicans have blasted Democrat plans to up federal spending as a boost to the economy by pointing out that the extra money has simply made goods and services more expensive.
“Democrats are determined to make life worse by passing a $3.5 trillion socialist spending binge that will crush families, dismantle our economy and reshape our country in the worst possible way,” said Republican House Minority Leader Kevin McCarthy of California.
It’s a message that even Democrats are beginning to hear.
“The challenge we now face is different: millions of jobs remain unfilled across the country and rising inflation rates are now an unavoidable tax on the wages and income of every American,” said Democrat Senator Joe Manchin (WV) in warning about future spending plans by his own party.
