The growth of the Producer Price Index is now at levels not seen since 1981. The PPI numbers came in this morning up 1.2% for the month, double expectations and after a 1.8% rise in June. On a year-over-year basis, inflation is up nearly 9.8%, a 27 year high. Less volatile food and energy costs, the PPI still rose 3.6% on a year-over-year basis.
Here is a breakdown of the inflation benchmark to show you where costs are rising most. The biggest increases for producers is on the raw material side, with energy up nearly 85% from one year ago. Keep in mind the July numbers do not fully reflect the recent drop in energy prices. We should see better numbers next month.