Consolidated Press News File
May 15, 2021
WASHINGTON — Wholesale prices rose 0.6 percent in April, shocking economists and providing more proof that inflation pressures are beginning to mount as the world emerges from a pandemic-induced recession.
The increase in the producer price index, which tracks inflationary pressures before they hit customers, was more than twice the 0.3 percent increase expected by economists. The rise came after a significant 1% increase in March, according to the Labor Department.
Wholesale prices have increased by 6.2 percent in the last year, the highest increase since the data was first collected in 2010.
Food prices increased by 2.1 percent in April, the largest monthly rise since a similar increase in October last year. The cost of airline services and food retailing services increased by 0.6 percent. The rise in the total cost was responsible for two-thirds of the increase in wholesale prices.
Core inflation, which excludes volatile food and energy prices, increased by 0.7 percent in April, indicating widespread price pressures as demand rises with the economy’s reopening. Core wholesale inflation has increased by 4.1 percent in the last year.
Officials from the Federal Reserve, including Chairman Jerome Powell, argue that recent price rises are only temporary as the economy reopens and are not a warning of out-of-control inflation.
However, rising prices have jolted Wall Street, which has now dropped three days in a row and seen the largest one-day decline in the S&P 500 since February.