Producer inflation rose 8 percent annually in October

While Biden crowed earlier in the month that the inflation rate decreased to 7.7% in October, new numbers released Tuesday showed that producer inflation — the price of items used to produce products — was unchanged in October at 8%.

The rate of inflation in October was 7.7%, down from 8.2% in September, but that decrease, however slight, is not likely to last long if producer inflation doesn’t come down as well.

Producers are likely trying hard to avoid passing price increases on to consumers, but eventually they will need to do so or risk going out of business, or at least longer-term financial instability.

The increase for final demand goods was .6% in October, which was the highest it has been since June when it was 2%.

Energy prices driving continued inflation

Much of the inflation is being driven by energy prices, which have seen rapid increases.

While there are not yet shortages in diesel fuel, oil and natural gas, they could be coming over the winter when people in colder climates most need to heat their homes and are less able to walk or ride bikes to their destinations.

Shortages in diesel fuel or higher diesel prices will result in further price increases for consumer goods, which are largely delivered to stores by diesel trucks.

Supply chain issues could also be further exacerbated if trucking companies go out of business because they can’t afford fuel or can’t obtain it.

The move to credit cards

Meanwhile, credit card debt had the highest jump in 20 years, up 15% since 2021.

People seem unable to slow their buying of goods and services, even if they can no longer afford to do so without going further into debt.

Continued high demand for goods will only extend or exacerbate inflation, which generally subsides when demand falls.

Perhaps layoffs, which traditionally occur when higher interest rates push the country into a recession, will cool consumer demand some.