by Wolf Richter
Businesses are confident they can pass on higher prices, plus some, to consumers.
The Producer Price Index for Final Demand tracks the input prices for consumer-facing industries whose output prices are then tracked by the Consumer Price Index which, WHOOSH, hit 7.9% in February, the worst since 1981. Today, the Bureau of Labor Statistics released the PPI Final Demand for February, which jumped by 0.8% in February from January, and by 10.0% from a year ago.
This marks the fourth month in a row that producer price inflation clocked in at around 10%, and all four months were by far the worst in the data going back to 2010 (red line). And it does not yet include the spike in fuel prices following Russia’s invasion of the Ukraine. That’s still to come.