WASHINGTON, D.C. – The inflation woes for Americans caused by a troubled economy are seemingly going to continue for the foreseeable future, as the prices for wholesale goods increased by nearly 10 percent in December, the largest-ever such gain recorded.
According to the Labor Department on Thursday, the producer price index – which tracks inflation at the wholesale level before products reach consumer retail shelves – jumped by a whopping 9.7 percent year-over-year from December 2020; an increase of this magnitude has never been seen since the government began tracking data of this sort in 2010.
While this spells impending pain for the wallets of U.S. residents, there are also signs that the economy may be coming to grips with inflation; from November to December, consumer prices only rose 0.2 percent overall, with food prices actually dropping 0.6 percent and energy prices going down 3.3 percent.
However, wholesale inflation does not include food or energy, whose prices are considered more “volatile” in comparison. The nearly 10 percent jump in December appeared to be fueled by a Labor Department report that stated consumer prices in December were up 7 percent year-over-year, the largest such increase at retail since 1982, and the fifth month in a row where prices have increased by over 5 percent.
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Federal Reserve Chairman Jerome Powell said that the U.S. central bank is planning on reducing their support for the U.S. economy – instituted during the COVID-19 pandemic – in an attempt to lower the nation’s inflation problems.
“As we move through this year, if things develop as expected, we’ll be normalizing policy, meaning we’re going to end our asset purchases in March, meaning we’ll be raising rates over the course of the year,” Powell said. “At some point perhaps later this year we will start to allow the balance sheet to run off, and that’s just the road to normalizing policy.”