Inflation measured by the Producer Price Index (PPI) reached 11.3% year-over-year in June, increasing by 0.4% from May, according to a Thursday report from the Bureau of Labor Statistics (BLS), just under the record of high 11.8% set in 1981.
The PPI measures the rough wholesale prices of goods received by domestic producers that will be subsequently purchased by consumers, according to the bureau. Much of its June surge resulted from a 10% increase in energy costs, according to BLS findings, as the prices for oil, natural gas and other products soared in June, according to AAA data.
Energy costs remain high amid the Russian invasion of Ukraine, which is cutting off fuel supplies, as well as the Biden administration’s climate policies that look to limit the use of fossil fuels.
Excluding energy, food and trade service prices, the core PPI rose by 6.4%, marking a reduction from the increase of 6.8% in May.
“Today’s PPI numbers were atrocious,” E.J. Antoni, a research fellow for regional economics in the Center for Data Analysis at the Heritage Foundation, told the Daily Caller News Foundation.
“Wholesale inflation has outpaced consumer-level (retail) inflation for every month of Biden’s presidency,” Antoni stated.
Despite the Biden administration’s suggestion that the worst of inflation is over, the PPI numbers are not encouraging, according to Antoni.
“With wholesale inflation at its second highest level on record, we are not out of the woods yet – not even close,” said Antoni. “More price increases at the consumer level are already baked into the cake and the idea that inflation has peaked is not supported by the data.”
BLS data also reported similarly high Consumer Price Index (CPI) numbers and declines in real wages as the CPI jumped to 9.1% in June and real average hourly earnings decreased by 3.6% from June 2021 to June 2022.
“Even if prices paid by businesses were to magically stop rising overnight, consumer prices would continue to rise as previous costs already paid by businesses are passed on to customers,” Antoni said.
Biden’s Federal Reserve plans to hike interest rates to slow the nation’s skyrocketing inflation, according to CNBC.
The BLS and White House did not immediately respond to the DCNF’s request for comment.
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