September 10, 2021 | 09:02
U.S. Producer Prices ... Still Under Pressure
It should come as no surprise that prices at the producer level are under pressure. They're paying more for materials, they're waiting a lot longer for the materials to be delivered (a LOT longer), they're paying more for the delivery methods, and they're paying more for people, or labor.
U.S. producer prices for finished goods jumped 0.7% in July (a record 8.3% y/y), just managing to exceed expectations. Although the increase itself was smaller than June and July's pair of 1.0% gains, it is still significant. Before 2021, the average headline increase was 0.1%. The average so far for 2021.... 0.85%! In July, goods (+1.0%) and services (+0.7%) both hoisted the headline, while construction costs were up a more modest 0.2%. Here's an interesting one .... costs for transportation and warehousing surged 2.8% in the month (15.8% y/y), the second highest since records began for this series in 1991.
Excluding food & energy, prices were up 0.6%, still heated, but just 0.3% when excluding trade services, the smallest increase in about 9 months.
Bottom Line: No let-up in this heat.