Wednesday should be interesting in the White House Briefing Room as press secretary Karine Jean-Pierre will undoubtedly be questioned about disturbing new data from the U.S. Bureau of Labor Statistics regarding the unexpected increase of the Producer Price Index (PPI), otherwise known as the metric that measures inflation at the wholesale level.
Yep, it’s still really bad. Economists and analytical firms had predicted that the proverbial tides would begin to turn in the economy’s favor with September’s data, but instead, only brought headwinds. According to CNBC, wholesale prices rose 0.4% in September, for an annual number of 8.5%.
“Excluding food, energy and trade services, the index increased 0.4% for the month and 5.6% from a year ago,” CNBC’s report added.
That doesn’t sound like much, but it’s pretty considerable given that the number was forecasted by top analysts and financial algorithms to begin to move in the opposite direction. The Dow Jones estimate, for example, had the number increasing by only 0.2%.
ANOTHER inflation index showing that prices are NOT slowing down…
Producer Price Index rose by 8.5 percent since last year, coming in above economists’ expectations. https://t.co/EtDhe1Au00
— Nathan Brand (@NathanBrandWA) October 12, 2022
Now, many are asking if inflation numbers have actually peaked, or wonder if the pain of inflation, which has crippled American consumers and business owners since President Joe Biden stepped foot in the White House, will continue to soar, furthering the crushing financial pain we’re already feeling.
The timing of the dismal PPI data, especially for President Biden and thousands of Democratic candidates across the country, couldn’t possibly be worse, as the 2022 midterms are less than four weeks out. Inflation has consistently been at the top of the issues list for a vast majority of American voters, and that doesn’t fare well for the party currently in power.
Fox Business dissected the numbers:
Overall, prices for goods jumped 0.4% last month after declining 1.1% in August. The bulk of the increase – about 60% – can be traced to a 1.2% monthly surge in prices for food, including a stunning 15.7% advance in the cost of fresh and dry vegetables, according to the Labor Department.
Energy prices, meanwhile, climbed 0.7%, despite a 2.0% drop in the cost of gasoline. That is largely due to the increase in the cost of diesel fuel, residential natural gas and home heating oil.
Meanwhile, the services index advanced 0.4% in September, the fifth consecutive rise. Most of the September increase can be attributed to a 0.6% rise in the index for final demand services excluding trade, transportation and warehousing. Prices for final demand transportation and warehousing services actually fell 0.2%.
Confirming fears that the inflation situation isn’t going away anytime soon was Jeffrey Roach, the chief economist at LPL Financial, who told Fox News that the country should probably brace for impact, as the Federal Reserve’s rate hike tactics clearly haven’t worked as intended, and will likely mean additional aggressive hikes in the coming months.
“This report does not yet have convincing evidence that inflation is cooling across the broad swath of the economy,” said Roach. “Expect to see the Fed recommit to fighting inflation at the risk of pushing the economy into recession.”
While the PPI is a crucial indicator, even more so is the Consumer Price Index (CPI), which is due out on Thursday morning. Fox Business noted that the economists they surveyed believe the number could increase by 0.3%, which would be a devastating increase from the 0.1% uptick in August, which was bad enough.
The CPI number, which typically echoes the PPI, will be a massive problem for Biden and the Democrats if it shoots up even a hair because that will be the last CPI number in the minds of millions of American voters when they head to the voting booth on Nov. 8.
Aside from the Fed making historically aggressive rate hikes, which will crush the economy in the meantime, the worst part about this increasingly dire situation is that the Biden administration doesn’t even seem to care. That’s the scary part.
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