Key inflation index up 11%

Inflation at the wholesale level climbed 11.3% in June compared with a year earlier, the latest painful reminder that inflation is running hot through the American economy.

The Labor Department reported Thursday that the US producer price index — which measures inflation before it hits consumers — rose at the fastest pace since hitting a record 11.6% in March.

Last month’s jump in wholesale inflation was led by energy prices, which soared 54% from a year earlier. But even excluding food and energy prices, which can swing wildly from month to month, producer prices in June jumped 8.2% from June 2021. On a month-to-month basis, wholesale inflation rose 1.1% from May to June, also the biggest jump since March.

Thursday’s report on wholesale prices came a day after the Labor Department reported that surging prices for gas, food and rent catapulted consumer inflation to a new four-decade peak in June, further pressuring households and likely sealing the case for another large interest rate hike by the Federal Reserve. Consumer prices soared 9.1% compared with a year earlier, the biggest yearly increase since 1981.

Producer prices have surged nearly 18% for goods and nearly 8% for services compared with June 2021. And the Labor Department said wholesale transportation and warehousing prices shot up 23% and food prices nearly 13% from a year ago.

This week’s reports showing persistently high consumer and wholesale inflation pressures indicate that the Fed will remain under pressure to continue raising rates sharply in the coming months.