The Labor Department revealed on Thursday that inflation at the wholesale level has surged beyond previous estimates for the month of February.
According to the latest data, the producer price index, a key measure of wholesale inflation, rose by 0.6% from January to February, marking a notable increase. On an annual basis, wholesale inflation stands at 1.6%, reaching its highest level since September of the previous year.
Wholesale inflation, also known as producer inflation, refers to the rate at which the prices of goods and services purchased by businesses at the wholesale level increase. This higher than anticipated rise in wholesale inflation has been a cause for concern amid ongoing economic challenges.
Additionally, the Labor Department also highlighted a 0.4% increase in the consumer price index from January to February, with a 3.2% surge compared to the same period last year. This exceeds the Federal Reserve’s target inflation rate of 2% annually.
These indicators suggest that the economy is still grappling with inflationary pressures, with the prices of goods and services remaining volatile. Despite a decline from its peak of 9.1% in 2022, consumer inflation remains at 3.2%, leaving American consumers facing prices approximately 20% higher than pre-pandemic levels.
The continuing high levels of inflation have prompted Treasury Secretary Janet Yellen to state that the economy could experience a rough decline in order to return to normal levels.
“I wouldn’t expect this to be a smooth path month to month, but the trend is clearly favorable,” Yellen said. “That said, President Biden’s top priority is addressing the issue of high costs that concerns so many Americans.”
When asked about the possibility of stagflation, an economy that experiences a combination of stagnant economic growth, high unemployment, and high inflation, Yellen attempted to ease concerns.
“I don’t think we’re going to see stagflation,” she said. “Most forecasters believe we’re on a path where inflation will come down over time.”
Yellen additionally walked back her previous statements, in which she claimed that the high levels of inflation were “transitory” and would not severely impact Americans’ daily lives for an extended period of time. “I regret saying it was transitory [inflation]. It has come down, but I think transitory means a few weeks or months to most people. And it’s lasted longer than that,” Janet Yellen told FOX Business.
This piece first appeared at TPUSA.
