TAMPA, Fla. (WFLA) — There are multiple measures for understanding inflation in the United States. The Bureau of Labor Statistics puts out the Consumer Price Index, which covers the cost for what you buy, but looks largely at the past. Another document to check is the Producer Price Index.
While the PPI also looks at prices from the month before, it helps gauge where prices will go, since it reports on what producers or makers are paying to get materials for what they sell us in stores.
In the past year, final demand costs, or what it costs for how much we buy and pay for, went up 11.2% compared to the year before, for its “unadjusted 12-month” change. On its own, Final demand costs are split between final demand goods and final demand services.
Within the goods grouping, food and consumer food is listed. The cost of final demand food went up 16.2%, which could mean the cost of groceries in the store and foods ordered at restaurants will continue to rise as inflation remains in a months-long upward trend.
The CPI that came out April 12 showed the U.S. inflation rate had hit 8.5%, the highest it’s been since 1981. The biggest single contributor to that cost increase was reportedly the cost of fuel. Gasoline had gotten 48% more expensive in the U.S. over the past 12 months.
The PPI that came out April 13 showed for producers, unprocessed fuel had grown 57.7% more expensive, while costs for foodstuffs and feedstuffs or groceries and livestock foods, had increased 35.2%. When it comes to grocery prices, the largest food item increase was for fresh and dry vegetables. Prices from February 2022 to March rose 42.4%, according to the PPI. Compared to last March, it was an 81.5% jump in prices.
Iron and steel scrap metal rose 27.6% in the past month, overall a 29.2% increase compared to 2021. After three months of price decreases, metal got more expensive in February. Russia’s invasion of Ukraine is February has affected the global market for multiple products, including metal. Ukraine is one of the largest producers of iron and steel in the world, so the conflict is affecting product output and prices as a result.
Grain prices were also higher, up 40.1% compared to last year, and 16.1% in just the past month, a big increase compared to any rise since October of 2021. Prices of grain also jumped in February, as Russia invaded Ukraine. Higher grain prices means higher costs to produce essentials like flour for bread and feed for livestock, which in turn could increase the price of those items at home.
The CPI released Tuesday showed while prices were generally up 8.5%, food was up higher at 8.8%. That price increase rose to 10% for food at home, groceries. Prices for meat, poultry, fish and eggs were already rising and have been for months, even before conflict in Ukraine. Now, a month into the crisis, prices were up 13.7% in the past year and up 1% in the past month.
Additionally, the U.S.’s higher prices are expected to reduce competitiveness in the second half of 2022, while export levels remain unchanged, according to the U.S. Department of Agriculture, as exports of meat from Ukraine and China slow down. The department reported the decrease in exports from Ukraine due to war with Russia could affect the global supply of pork and chicken, while Russia’s exports of beef and pork are also contributing factors to market fluctuations.
Now with feed also affected, even domestic livestock could grow more costly as it becomes harder to maintain their nutritional needs due to shortages and product delays. At the same time, demand for all of those products has continued to grow.