Inflation concerns rise amid price increases, trucker shortage, holiday season delays

National

A shopper guides a cart past a line of gigantic boxes of breakfast cereals in a Costco warehouse on Thursday, June 17, 2021, in Lone Tree, Colo. Inflation at the wholesale level jumped 1% in June, pushing price gains over the past 12 months up by a record 7.3%. The Labor Department reported Wednesday, July 14 that the June increase in its producer price index, which measures inflation pressures before they reach consumers, followed a gain of 0.8% in May and was the largest one-month increase since January. (AP Photo/David Zalubowski)

TAMPA, Fla. (WFLA) — The increased costs of goods, services and energy are hitting consumers at stores and online as products become more expensive and transportation costs increase, making inflation a hot topic as the holidays approach.

The U.S. Bureau of Labor Statistics reported producer prices are rising alongside costs for consumers and costs of labor across the country. According to BLS, October 2021 saw the producer price index increase 1.2 percent for what’s called final demand goods. Final demand is the total demand for final goods and services in an economy at a given time.

In economics, final demand less foods and energy is “an aggregate of prices paid by consumers for a typical basket of goods, excluding food and energy,” according to the Federal Reserve Bank of St. Louis.

The index for final demand services rose 0.2 percent and prices for final demand construction increased 6.6 percent. Final demand less food, energy and trade services moved up 0.4 percent in October, a higher increase than September 2021 where those prices rose 0.1 percent.

The rise in index for final demand services and the increase in final demand less food, energy and trade services in October shows that as demand increases, cost follows. The rising price of gasoline was a major cause of price changes, with the gas cost accounting for one third of October’s increases, according to BLS.

The cost of gas rose 6.7 percent, even as the costs for products such as beef and veal decreases more than 10 percent according to the bureau.

The same report said more than 80 percent of October’s price increases for final demand services were traced back to the margins for automobiles and the retailing of automobile parts, according to BLS. The margin and retailing increased 8.9 percent in October.

While the costs for hospital outpatient care, machinery and equipment parts, supply wholesaling, apparel, footwear, truck transport of freight, and food and alcohol sales all increased, financial services costs decreased. Prices for securities brokerage, dealing, investment advice and related services reportedly fell 6.6 percent, according to BLS.

The big driver on goods price increases was a 14.2 percent increase in diesel fuel costs, according to BLS. The demand for services less trade, transportation and warehousing dropped slightly.

October’s job numbers were much higher than the month before, in terms of how many openings were added to the U.S. job market. 531,000 jobs were added across all industries, but the BLS notes that the notable gains were “in leisure and hospitality, in professional and business services, in manufacturing, and in transportation and warehousing.”

The number of workers in public education declined over October, even as the national unemployment rate decreased to 4.6 percent, with 7.4 million unemployed persons in the U.S., which BLS calls a considerable drop then the unemployment highs during the February to April 2020 recession. Still, unemployment is higher than before the COVID-19 pandemic.

With the focus on transportation costs increasing, and inflation as a result, the higher number of job openings included opportunities for truck drivers and warehouse workers. Bureau data projects that the number of openings for heavy and tractor trailer truck drivers will increase by more than 230,000 per year through 2030.

The American Trucking Associations report that the industry is short 80,000 drivers as of Oct. 25, and that the number may double by 2030. Fewer drivers means delays for shipping products.

Shipping delays and inflation have bogged down the Biden administration’s goals and messaging on economic recovery and the push for new infrastructure spending.

One step to address this in the newly passed Infrastructure Investment and Jobs Act has a provision that would lower the age required to drive commercially between states. Right now, 18-year-olds are able to drive commercially in some states, but must be 21 years old to drive cross country.

The provision would open a certification program to allow younger drivers to perform this job, but with the law still awaiting President Joe Biden’s signature, implementation is still going to take time. As the president works to pass his Build Back Better agenda, that time may not be on the president’s side while the economy continues to stumble, and costs for everything from gas to housing is on the rise.

Copyright 2021 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Coronavirus Need-to-Know Info

More Coronavirus

Trending Stories

get the app

News App

Weather App

Don't Miss

More Don't Miss