U.S. Producer Prices Spike 10.8% in May

Even as exhausted Americans painfully refill their gas tanks, hopelessly scroll real estate listings, and suffer sticker shock every time they browse the aisles of grocery stores, skyrocketing prices won’t be letting up any time soon. Inflation has officially hit a 40-year high, and that has many Americans staring at the gas pump, wondering: why?

A Tuesday report from the Labor Department hints that high inflation will not be slowing down in the coming months. Energy prices rose 5% in May from April, and with average national gas prices hitting $5 per gallon for the first time ever— $2 more than it was a year ago, when prices were a much cooler $3.08— costs of other goods are also on the rise.

Food prices are up almost 11% compared to May of last year. Those prices also grew 0.8% in May following April, a figure which doubled when compared to a month prior. Food costs, though, appear to be unusually high compared to the overall inflation rate of 8.3%, with certain foods priced well above average inflation percentages.

With the costs of food broken down, it may be vegans who are walking out of the grocery store with the highest savings, while those who love eggs, meat, and dairy are getting price-gouged at the checkout line.

When compared to April of last year, egg prices increased by 22.6%, chicken by 16.4%, milk is priced 14.7% higher, beef/veal is 14.3% higher, pork is 13.7% more expensive, fish/seafood is 11.9% more expensive, beans/peas/lentils are 9.8% higher, fruit is 8.3% more expensive, and vegetables have increased in price by 6.2%.

According to American meat-processing giant Tyson Foods — whose net income of $829 million marked a 74.16% increase for April 2022— prices are being hiked in response to a higher demand for meat, increased labor and fuel costs. The bird flu may also be to blame for the increase in prices, considering that 38 million birds have been culled to stop its spread.

The culling of farm birds has sparked controversy, as 73% of culls have used inhumane methods such as ventilation shutdown, in which birds are sealed up in their poultry sheds without air so that increasing temperatures basically cook the animals alive.

Consumer protection advocates are calling out businesses like Tyson for using inflation as a cover while they increase their profits.

“[Tyson had] roughly $1.5 billion in higher costs, but that’s corresponded with $2 billion in price increases,” said Claire Kelloway from the Open Markets Institute, an anti-monopoly nonprofit organization whose goal is to put an end to monopolies. “So that is a solid half a billion dollars that is not related to an increased cost of business. That’s purely an exercise of their market power and ability to charge more, and their profits really speak to that.”

“There’s no question there’s been price gouging through the COVID-19 disaster, and there’s no question that that price gouging continues,” said John Hansen from the Nebraska Farmers Union.

While some companies continue to rake in profits, an increase in consumer spending following the COVID-19 pandemic has also backed up supply chains, causing shortages and an increase in prices.

Some Americans have saved their COVID-19 stimulus checks from the government and are set to spend that cash. For example: after two years of being locked indoors, people are itching to travel. While airfare costs are about 33% higher than they were in 2019, 25% more people are flying compared to last year.

But with the costs of food, energy, and housing increasing at a rate much higher than the average person’s wage, many Americans will have no choice but to cool their spending in the coming months.