Squeezing businesses and inflicting real pain on millions of American households, U.S. inflation at the wholesale level rose — yes, once again more than “the experts” expected — in September as prices for everyday necessities remain at a multi-decade high.
The Labor Department said Wednesday that its producer price index, which measures inflation at the wholesale level before it reaches consumers, rose 0.4% in September from the previous month. On an annual basis, prices soared 8.5%.
Those figures were both higher than the 8.3% headline figure and 0.3% monthly gain forecast by Refinitiv economists, a worrisome sign for the Federal Reserve as it seeks to cool price gains and tame consumer demand with an aggressive interest rate hike campaign.
Excluding food, energy and trade services, inflation at the wholesale level increased 0.4% for the month – the fastest gain since May. Over the past 12 months, core prices climbed 5.6%.
MacDailyNews Take: When certain quarters, including the Fed, delude themselves and others that “inflation is transitory” and waste at least a year before doing a mere portion of what is necessary* (interest rate hikes), the price will be paid for being delusional and late.
Catching up will be difficult. But, hey, good luck on that soft landing. 🙄 – MacDailyNews, September 13, 2022
In January, Interactive Brokers founder Thomas Peterffy said of the U.S. Federal Reserve, “If they really wanted to stop inflation, they would have to raise rates to 4%, 5%, 6%.”
The Fed’s current target interest rate range is 3.00% to 3.25%. Peterffy may have been too conservative. Rates in excess of 6% may be required at this point.
‘Tis best to get a handle on inflation, if you know how, while you still can. – MacDailyNews, May 11, 2021
*Stop the misguided crusade against domestic energy production and profligate federal spending and inflation will be stopped dead in its tracks. It’s not difficult. – MacDailyNews, May 11, 2022
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