Compared to October 2020, wholesale prices rose over 8.6 percent last month, according to the Labor Department.
The quick incline in cost is the highest in over a decade, similar to the recent spike in inflation. Year over year records dating from November of 2010 suggests a 6.2 percent increase in core producer prices or producers’ final demand prices. This represents the price for a good or service dependent on the desire of potential buyers and the rate of supply. When demand for a product rises, so does the demand price.
“Goods prices rose 1.2% compared with just a 0.2% increase for services, while construction prices jumped 6.6%,” as reported by CNBC. “One-third of the increase in goods prices came from soaring gasoline, with prices rising 6.7%. Beef and veal prices represented the other side of the ledger, posting a collective decline of 10.3%. The index for light motor trucks, a key driver of inflation this year, moved lower as did residential electric power.”
Much of the price increases are due to “continued supply disruptions and labor shortages,” Credit Union National Association senior economist Dawit Kebede said. “The imbalances between demand and supply that have been driving price increases hasn’t changed after a slight indication of slowing down in August.”
Internationally and domestically, America’s supply chain has faced incredible backups. One aspect of the issue is a lack of truck drivers, which contributes to the rise in demand price as distribution is slowed.
ARTICLE: ANTOINETTE AHO
MANAGING EDITOR: CARSON CHOATE
PHOTO CREDITS: MARKET WATCH
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