Biden Government under duress: inflation surges by 10% in Feb 2022

Key Takeaway:

  • The US Wholesale Inflation surged to 10% in Feb 2022.

Last month, wholesale inflation in the United States increased by 10% from a year ago, indicating that inflationary pressures remain high at all levels of the economy.

The producer price index, which measures inflation before it reaches consumers, climbed 0.8 percent in December, according to the Labor Department. The rises corresponded to economists’ predictions.

However, because the study does not track price increases after February 15, the increase in oil and gas prices following Russia’s invasion of Ukraine late last month is not reflected.

Wholesale inflation, which is tracked by the producer price index and represents costs before they reach consumers, is a separate gauge from consumer inflation, according to the Associated Press.

Wholesale inflation increased 0.2 percent in January and 8.4 percent in February 2021, excluding volatile food and energy prices.

Consumer prices rose 7.9% in February from a year earlier, according to the government, the highest increase since 1982, due to rising petrol, food, and housing costs.

Inflation, which had been dormant for four decades, resurfaced last year when the US recovered at an unexpectedly fast pace from the short but severe coronavirus recession of 2020.

Companies struggled to secure supplies and staff after being caught off guard by an unexpected rise in orders from consumers with government relief checks.

Factories, ports, and freight yards were all put to the test. As a result of the delays, prices began to climb.

The Bureau of Labor Statistics (BLS) also revised its initial January figure from 9.7% to 10% wholesale inflation. According to CNN, the producer price index surpassed double digits for the first time in January since it began measuring inflation in 2010.

Although the Energy Price Surge after the Russian Invasion is not included in the Labor Department’s February report, gasoline accounts for a significant share of the increase.

The Biden administration is under a lot of pressure to do something about rising costs and their impact on people’s wallets. President Joe Biden said in a statement released in response to last week’s consumer price index report that Americans were already feeling the financial effects of Russia’s conflict on Ukraine, and he highlighted his efforts to combat the trend.

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Shambhavi Soni