Producer prices have surged by the largest annual increase in nearly a decade, the Labor Department reported Friday.
The Producer Price Index, which tracks input costs for producers, is up 8.3 percent since August 2020—the largest year-over-year increase since November 2010. The index increased 0.7 percent in August alone, above the 0.6 percent expected by economists, marking the fifth consecutive month of record price increases.
The spike in prices comes as businesses struggle to hire workers, driving up their operating costs. Job openings hit a record 10.9 million in July even as millions of Americans remain unemployed, the Labor Department reported this week. President Joe Biden has faced criticism from economists who say his enhanced employment benefits, which expired this month, have exacerbated the country's tight labor market.
Concerns about inflation are complicating Democrats' efforts to pass the party's $3.5 trillion spending package in Congress. Democratic senator Joe Manchin (W.Va.) said he will withhold his support for the reconciliation bill, saying it will worsen the nation's soaring inflation, which is "bleeding the value of Americans' wages and income."
"I believe that spending trillions more dollars not only ignores present economic reality, but makes it certain that America will be fiscally weakened when it faces a future recession or national emergency," the senator wrote in a Wall Street Journal op-ed last week.