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Economic Report: U.S. wholesale inflation surges again on higher prices of gas and vegetables

The numbers: Wholesale prices in the U.S. surged again in October and offered little sign that the biggest increase in inflation in decades is going to peter out soon.

The producer price index rose 0.6% last month, the government said Wednesday. The wholesale cost of gas and vegetables both rose sharply to account for a sizable chunk of the increase.

Economists polled by The Wall Street Journal had forecast a 0.6% advance.

Since January wholesale prices have climbed at least 0.5% in every single month. Before the pandemic they averaged less than a 0.2% increase each month.

Read: Inflation rises at 5.4% yearly pace, CPI shows, and stays at 30-year high

The pace of wholesale inflation over the past 12 months was flat at 8.6%. That’s the highest level since the index was reconfigured in 2009, and likely one of the highest readings since the early 1980s.

Big picture: High inflation is expected to persist well into next year.

Read: Fed still thinks surging U.S. inflation won’t last, but it’s hedging its bets

The U.S. is facing a big shortage of workers and supplies at a time of soaring demand, making it hard for companies to produce enough goods and services to keep up. They are paying more for everything.

The yearly pace of inflation using the Federal Reserve’s preferred PCE price gauge just hit a 30-year high of 4.4%. And the better known consumer price index has jumped 5.4% in the same span. The latest CPI comes out Wednesday.

Senior Fed officials predict inflation will subside in 2022 as the shortages ease, brining inflation back down to around 2.2%. That would be just a hair above the Fed’s 2% target.

Yet Fed officials have persistently gotten their forecasts wrong this year and some critics contend its easy-money policies are helping to stoke the spike in inflation.

Read: Top Fed officials signal interest-rate increases in 2022 are on the table

Market reaction: The Dow Jones Industrial Average
DJIA,
+0.29%

and S&P 500
SPX,
+0.09%

were set to open lower in Wednesday trades.

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