The Prices US producers receive for their products rose again in July. Prices have been rising for some time, partly because there is a lot of demand for various products.
Also, because the supply of materials is faltering and because the costs of raw materials such as metals, wood, and grains and soybeans are rising.
Producer prices rose 1 percent from June, the US Department of Labor reported. However, compared to July 2020, the increase was 7.8 percent. That is the most significant annual increase recorded by the ministry since 2010.
Rising producer prices are part of the explanation for rising inflation. Companies will also want to partly pass on the higher prices they have to pay to producers from their customers. Rising wages due to a shortage in the labour market also contribute to this.
On Wednesday, it was announced that US inflation had risen less sharply in July. Despite this, the monetary depreciation remains high enough that there are questions about whether the Federal Reserve, the American umbrella organization of central banks, will reduce corona support in the short term.
Some economists even think the Fed will raise interest rates earlier than the central bank currently expects.