More gloomy inflation news: Producer Price Index jumps 9.6%.

Inflation doesn’t look transitory today. The Bureau of Labor Statistics reports a record hike in the Producer Prince Index. 

The Producer Price Index for final demand increased 0.8 percent in November, seasonally
adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices moved up 0.6
percent in each of the 3 prior months. (See table A.) On an unadjusted basis, the final demand
index rose 9.6 percent for the 12 months ended in November, the largest advance since 12-month data were first calculated in November 2010.

CNBC reports on the increase.

Those numbers come with headline consumer prices running at their fastest pace in nearly 40 years and core inflation the hottest in about 30 years.

Demand for goods continued to be the bigger driver for producer prices, rising 1.2% for the month, a touch slower than the 1.3% October increase. Final demand services inflation ran at a 0.7% monthly rate, much faster than the 0.2% October rate and a sign that the services side could be catching up in prices after lagging through much of the recovery.


Fed officials for months had been insisting that inflation was “transitory” and closely tied to Covid pandemic-related factors that eventually would fade. However, in recent days Chairman Jerome Powell and others have indicated that word no longer is appropriate and likely will be dropped from future central bank communications.

Supply chain bottlenecks and surging demand have been the primary drivers of inflation, and have eased only marginally.

Yesterday’s newsletter included the results of our November poll, which showed Washington voters are increasingly worried about direction of the state, the economy and their own personal finances. The persistence of rising inflation rates will give topspin to those concerns.