Wholesale prices jumped last month at a rate 9.7% higher than a year ago, the Labor Department said Tuesday in another sign that inflation remains high.
The producer price index, a measure of inflation before goods reach consumers, rose 1% from December. Excluding food and energy prices, wholesale inflation rose 0.8% from the previous month and climbed 8.3% from January 2021.
The department said a 1.6% increase in outpatient health care costs was a “major factor” in the jump.
The rate was twice as high as expected by many economists, and was near a record in data going back to 2010.
Consumer prices soared 7.5% in January, the government reported last week, reaching a 40-year high that has wiped out wage gains for many workers.
Inflation is looming as a major campaign issue in the midterm elections.
“President Biden continues to be Jimmy Carter 2.0,” tweeted Sen. Ted Cruz, Texas Republican, in response to the new report.
Hans Dau, CEO of the Mitchell Madison Group consulting firm, said the “perfect storm” of pent-up demand meeting limited supply means consumer prices will likely rise further to meet the higher level of producer prices.
“Producer price inflation is likely to work itself into consumer inflation through the supply chain, indicating continuing high inflation for much of 2022,” Mr. Dau said. “With omicron waning, this trend will accelerate in the short-term, unless the Fed hits the brakes hard and triggers a recession.”
Mr. Dau added that “historically high fiscal spending and accommodative central bank policies globally” have contributed to the supply chain crisis.