The Producer Price Index (PPI) rose 1.4% in March 2022. This follows the February increase revised up by 0.1% to 0.9%. The January increase was previously revised up by 0.2% to 1.2%.
That is 3.5% in the first quarter of 2022.
The increases are driven by strong consumer demand and constrained supply.
Powerful demand is compounded by trillions of dollars having been flooded into the economy. On the supply side, ongoing supply chain problems are compounded by things like shutting down Shanghai, a city of 27 million which takes off line all their production and stops shipping from a major port. Further restricting the supply side are also soaring energy prices due to U.S. federal policies and the war in Ukraine.
Keep in mind the prior month changes in PPI are revised as needed. This is in contrast to CPI, which is not revised.
This shows there are plenty of increases in wholesale prices, which means there is a lot of inflation heading our way because that is what producers and providers are experiencing. Those increases will hit us consumers soon.
Graph at the top of this post shows the monthly price change for total demand, final demand core (which excludes food, energy, and trade), along with three month average of the final demand.
With revisions, the year over year increase in PPI for recent months is:(more…)