Contact us
CALL US NOW 1-888-GOLD-160

Producer Prices Close to Record Levels in June

  by    0   0

If you’re hoping red-hot inflation will cool down significantly in the coming months, you’re probably going to be disappointed if producer prices provide any indication.

The Producer Price Index (PPI) shot up at a near-record pace in June, rising 11.3% on an annual basis. That was just off the record 11.6% increase last March. The expectation was for a 10.7% gain. Month on month, PPI rose 1.1%, above the 0.8% projection.

Core CPI, stripping out food and energy costs, looked a little better, up 6.4% year on year and 0.3% month-on-month. While those numbers were down from May, they are still exceptionally high, indicating there is a lot of price pressure still in the pipeline.

Breaking down the numbers further, the wholesale price for goods was up a blistering 2.4% last month. That was a full percentage point higher than last month’s 1.4% read. It was the sixth consecutive rise in wholesale prices for goods.

According to the BLS, over half of the June increase in the index for final demand goods is attributable to gasoline prices, which jumped 18.5%.

The services index rose 0.4%, the same rate of increase as we saw in May.

Wholesale prices continue to rise even faster than the CPI, indicating producers are still eating some of their rising costs. PPI is generally considered a leading indicator of future hikes in consumer prices since consumer prices typically lag behind producer prices. As Peter Schiff put it in a podcast, “Before businesses can pass on their higher costs, to their customers, they have to experience those higher costs themselves.”

Looking at the data over the last year-plus, we see a persistently large gap between the prices producers are paying and the prices consumers are paying. That likely means we’ll see more hikes in consumer prices down the road.

PNC senior economist Kurt Rankin told CNN, “The higher prices producers are experiencing will eventually be passed along to consumers in the months ahead.”

Despite the left-wing spin blaming price gouging “greedy corporations” for inflation, companies generally have been slow to raise prices as fast as their costs. Schiff noted that the actual data undercuts the left-wing narrative.

You have all these people like Elizabeth Warren claiming that it’s the producer gouging the consumer. But these numbers belie that claim because producers are seeing larger increases in their costs than what they’ve been passing on to consumers in the form of finished good prices. So, it’s not true that this represents ‘price gouging.’ If anything, the consumer is still gouging the producer because the producer is eating part of the price increase in diminished margins.”

Gold Scams Free Report

Get Peter Schiff’s most important gold headlines once per week – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!

Related Posts

Atlanta Fed Lowers Q3 GDP Growth Forecast Close to Zero

The Atlanta Fed has lowered its GDP estimate for the third quarter to 0.3%, and the trend is downward. That means the economy is teetering on the verge of another quarter of negative GDP growth. Would that be enough to raise recession alarms?


Fed Rate Hikes Will Add Trillions to National Debt

Federal Reserve rate hikes will add trillions to the national debt, according to an analysis by the Committee for a Responsible Federal Budget.


Chinese Gold Demand Appears to Be Picking Up Again

Gold demand in China showed renewed strength over the last two months despite scattered COVID-19 lockdowns. Both gold withdrawals from the Shanghai Gold Exchange (SGE) in August and gold imports in July were up. China ranks as the world’s number one gold consumer.


Some Things Never Change: US Government Runs Another Big Deficit in August

Some things never change — such as the federal government spending more money than it has month after month after month. August was no different. The US government ran a massive $219.6 billion budget deficit last month, according to the latest Monthly Treasury Statement. That nudged out July as the second-largest monthly deficit in fiscal […]


Queen Elizabeth’s Death Puts Squeeze on Already Tight Bullion Coin Market

The recent death of Queen Elizabeth II is squeezing gold and silver bullion coin markets that were already strained by tight supplies. There was an immediate and dramatic surge in demand for gold and silver bullion coins bearing the queen’s effigy upon her passing. According to in Australia, “Collectors are scrambling to get their […]


Comments are closed.

Call Now