The producer price index (PPI) in the United States has reached a record high following months of a government spending binge.
In a report released on Thursday, the Bureau of Labor Statistics concluded that the producer price index, which measures changes in selling prices received by domestic producers of goods and services, hit an all-time high of 7.8 percent for 12 months ending in July after massive federal spending continues to shake down the American economy. According to the Labor Department, that’s the “largest advance since 12-month data were first calculated in November 2010.”
The report also indicated that the PPI without foods, energy, and trade services totaled 6.1 percent, “the largest increase since 12-month data were first calculated in August 2014.” According to the report, food alone shot up 21.1 percent since last July and energy also increased by 17.9 percent under stage 4 intermediate demand from producers. Food and beverage for immediate consumption services rose by 4.6 percent.
Other goods that saw massive increases since July 2020 included materials and components used in construction, which swelled as a processed good by 20.4 percent; automobile retailing, which increased by 76.7 percent; and gasoline, which rose by 78 percent.
“Roughly 75 percent of July’s monthly PPI increase came from rising prices for services, the Labor Department said, but much of that rise was driven by the automobile sector and auto retailers, which have been slammed by crucial parts shortages,” The Hill reported.
Not only did the inflation rise above experts’ expectations that the index would rise only 0.6 percent between June and July when it actually increased by 1 percent, but it also outpaced the 7.3 percent measured by the department in June.
“Nearly three-fourths of the July increase in the final demand index can be traced to a 1.1-percent advance in prices for final demand services,” the report states.
President Joe Biden and his administration have repeatedly claimed that the current state of inflation in the United States will be short-lived, but reports indicate the U.S. economy is underperforming due to inflation caused by reckless government spending following government lockdowns, continued supply chain shortages, and understaffing.