Inflation pressure evident at producer level

Mitchell Hartman Feb 15, 2018
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Inflation pressure evident at producer level

Mitchell Hartman Feb 15, 2018
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The producer price index for January rose 0.4 percent month-to-month, and 2.7 percent year-to-year. Core producer prices, excluding volatile food and energy prices, were up 2.2 percent year-to-year. Producer prices remained muted after the Great Recession as economic growth was sluggish, but upward price pressure appears to be building at both the wholesale and retail levels now, as the labor market approaches full employment and economic activity ramps up, creating supply and labor bottlenecks. In addition, the global economy is now stronger, which leads to more demand and higher prices for raw materials. The U.S. dollar has also weakened, increasing the prices of imports, which is showing up in both the producer and consumer price indexes. 

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