On Wednesday, US Labour Department data had revealed that the US Producer Price Index, a critical indicator to wholesale prices alongside the changes in average prices of the domestic goods’ producers, rose 0.4 per cent in September, mostly boosted up by an unprecedented surge in food prices.
Apart from that, an increase of 0.4 per cent in US Produce Price Index last month followed a rise of 0.3 per cent in August alongside a 0.6 per cent upsurge in July that happened to be the index’s biggest monthly gain since late-2018.
In point of fact, followed by the release of US Produce Price Index data for September, several analysts were quoted saying that the rise was largely goaded by a surge of 1.2 per cent in food costs as a second-wave of pandemic outbreak seemed to be disrupting supply chains and prompting the pandemic propelled forced shutdowns.
More importantly, a 1.2 per cent spike in wholesale food prices in September had been the largest monthly rise since a record leapfrog of 5.6 per cent in food prices registered in May, while industry analysts had raised a red-flag on food costs over the coming months due to a steep shortage of crops due to a stormy summer that swept an approximated tens of thousands of acres of harvests alongside mass-scale shutdowns of food processing plants.
US Produce Price Index rise 0.4 per cent last month as food prices soar
Nonetheless, despite an unprecedented rise in food costs which seemed to have bolted out of the blue, energy prices fell for the second consecutive month on September, dipping 0.3 per cent following a drop of 0.1 per cent in August.
Concomitantly, amid a tepid inflation outlook, Wednesday’s data had bolstered views that the US inflation would unlikely to reach the US Fed’s target range of an above-2 per cent in a near-future, since the US inflation in retail level rose 0.2 per cent last month, just half of the August gain despite a jump in used car prices by the steepest pace in more than five decades in September.