The Consumer Price Index continued its climb last month. The Bureau of Labor Statistics said wholesale prices were up 1 percent in January. That’s a leap of almost 10 percent over the past year. Those increases are fueling a generation-high level of inflation, driving up the prices on everything from bread to bricks.
That 1 percent increase doubled what economists predicted, CNBC said. But that disappointing report only confirms what customers and businesses have felt for months: the dollar doesn’t go as far as it once did.
“PPI offers a window to the price pressures that businesses are facing, and which will likely be passed on to consumers in the way of consumer price inflation in the months to come,” PNC economist Kurt Rankin wrote, per CNBC. “Strong gains across the board for businesses reinforce the inflationary concerns that the Federal Reserve is set to battle this year with monetary policy, and which the economy in general has recently begun expressing caution and concern over.”
The Fed said it will raise interest rates next month in hopes of stabilizing the dollar. President Joe Biden pinned the blame on supply-chain problems that have plagued the country throughout the pandemic. Though, Republicans say the president’s spending plan is also a serious factor.
Biden told reporters yesterday that the believes prices will fall soon. Though, he knows families are struggling to make ends meet.
“It’s a real bump in the road,” he said. “It does affect families when you walk into a grocery store and you’re paying more for whatever you’re purchasing. It matters to people when you’re paying more for gas, although in some states we’ve got the price down below three bucks a gallon. But the point is it’s not gone down quickly enough. But I think it will.”
Small Businesses Are Raising Prices at Record Rates
Small businesses are feeling the pinch of labor shortages and rising costs. A recent study found that more than three-fourths of small businesses have had to raise their prices to keep up, Fox News reported. So far, 82 percent have asked customers to pay more at the counter.
“For most small business owners, this is a whole new environment they have to navigate–and it’s proving to be an incredible challenge,” said the National Federation of Independent Business’s executive director Holly Wade.
More than 60 percent of small businesses can’t fill open positions. According to the U.S. Bureau of Labor Statistics, there are 3.5 million fewer people in the workforce today than two years ago, U.S. Today reported. That has grown the pool of potential jobs available, which lets employees be more discerning. Some businesses have raised pay to keep up, but that is also contributing to rising overheads.