Increase in Producer Prices Set Record

While the consumer price index has risen 5.3% over the past 12 months, producer prices for final demand goods and services have jumped 7.7% — the biggest increase on record, according to Chad Moutray, chief economist for the National Association of Manufacturers. (This graph shows the price increase for all manufacturing.)

Despite the recent spike in prices, experts at OMA Connections Partner RSM said this week that “expectations are for the inflation rate in the next few years to move above 2.3% before settling back to roughly 2.25% over time.” (On Tuesday, Aug. 24, RSM will present an OMA webinar to examine how current economic and industry trends will affect manufacturers in “the Roaring ’20s.”)

Nationwide, manufacturing production increased 1.4% in July, the strongest monthly gain since March, according to the Federal Reserve. But the chip shortage and supply-chain disruptions have hindered vehicle production, which remained down 3.6% since January. 8/17/2021