Prices for Goods Reach Record Highs, Energy Costs and Supply Chain Issues Add to Pain
19:04 GMT 15.03.2022 (Updated: 19:05 GMT 15.03.2022)
© AP Photo / Damian DovarganesA grocery store employee walks through an aisle.
© AP Photo / Damian Dovarganes
Much of the increase is said to be the result of rising energy and food costs as a result of global unrest. When not considering the increases in energy, food and services, wholesale prices rose 0.2% in the month of February, compared to a 0.8% increase last month, according to recent reports.
The price of wholesale goods rose 2.4% for the month of February and 10% the last year. This is the highest increase since the Department of Labor started tracking the statistic over a decade ago.
Supply chain issues caused by the ongoing COVID pandemic, as well as global markets reacting to the Kremlin's special military operation in Ukraine and a crippling sanctions backlash by the West and many other nations against Russia, are primary drivers for the increase.
The consumer price of goods jumped 7.9% over this time last year, the highest since 1982, resulting in a 2.6% drop in real wages for American workers.
The wholesale goods price or Producer Price Index (PPI) does not always move in lockstep with the Consumer Price Index (CPI) but the two are correlated. PPI looks at the cost for sellers, considering everything that goes into products before being bought by consumers. CPI, however, is concerned with the consumer price of goods and services, relative to income.
A few notable goods didn’t see an increase, with vegetable prices dropping in February and beef and sheet metal staying flat.
According to Stephen Stanley, chief economist at Amherst Pierpont via The Wall Street Journal, the increase in CPI will be felt by consumers in the “next month or two” as wholesale price increases are passed down to consumers, particularly in the meat and dairy industries.