May 12 (UPI) — Producer prices in the United States — those that are paid by retailers before items are resold to shoppers — were more than 10% higher in April than they were a year ago, the Labor Department said in its monthly survey Thursday.
The department’s Producer Price Index showed that wholesale prices climbed by 11% from April 2021 through last month. The increase was 0.5% from March to April.
The index is a key inflation gauge for business and vendors before the higher prices ultimately trickle down to consumers.
Thursday’s report said that prices increased for new vehicles, diesel fuel and natural gas — while the index for gasoline declined by more than 3%.
Prices for goods in the United States have risen at a steady pace over the past year, due to a number of factors. Consumer inflation has been running at 40-year highs in recent months and the Labor Department said on Wednesday that its consumer index was up by 8.3% year-to-year in April.
President Joe Biden has made several steps to control rising costs — including moves to stem gas prices, which have been the primary driver of inflation. The Federal Reserve also took dramatic action last week by hiking interest rates by a half-point, which was the largest single increase in 22 years.
The Fed is expected to raise rates even further at its next policy meetings this summer.
Raising interest rates — and thereby slowing consumer spending — is a traditional method to control inflation. The Federal Reserve considers the economy healthy when inflation is running at around 2%.
Apart from energy, another product that has significant influence on inflation is food. The department said in its report Thursday that wholesale food prices rose by 1.5% in April.
Biden visited Illinois on Wednesday to expand on federal efforts to rein in inflation and promised more help for farmers to keep food production costs down.
“You see prices at the grocery store have gone up and the prices farmers receive have gone down,” he said during a visit near Chicago. “Capitalism without competition is not capitalism. It’s exploitation.”