Wholesale inflation jumps over the past year

An ongoing price surge caused wholesale inflation to rise 10 percent in the past 12 months. The Labor Department said its producer price index, which tracks inflation before it hits consumers’ wallets, increased by 0.8 percent in January. Wholesale energy prices also surged by nearly 34 percent in the past 12 months, and food prices rose by about 14 percent.

What caused the spike? The economy recovered quickly from the COVID-19 recession — fueled partly by government spending — and suppliers could not keep up with demand, causing price surges. Last week, the government said the rise in gas, food, and housing costs pushed consumer prices to the sharpest one-year spike since 1982. The latest wholesale inflation report does not include data beyond Feb. 15, when energy prices spiked because of Russia’s invasion of Ukraine. The Federal Reserve is expected to raise interest rates several times this year in hopes of slowing inflation.

Dig deeper: Read Esther Eaton’s report in The Stew on how U.S. leaders are looking for alternative energy sources while slashing Russian oil imports.