Companies paid significantly higher prices to producers in April, and prices of construction materials also rose sharply, in two more signs of inflation for the recovering U.S. economy.
The Producer Price Index rose 0.6% from March, the U.S. Bureau of Labor Statistics reported on Thursday. The index jumped 6.2% over the past 12 months, the largest increase since the government began tracking the data in 2010.
The PPI tracks the cost of goods, from steel to meat, paid by companies. The core PPI, which excludes items such as food and energy, increased 0.7% in April and jumped 4.6% year over year — the largest annual increase since 2014.
Construction input prices also increased 1.3% in April compared to the previous month, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics data released Thursday.
The price of softwood lumber rose 6.4% in April and 121% over the past 12 months, ABC said. Steel mill products climbed 18% last month, and 67% in the past 12 months.
ABC chief economist Anirban Basu said much of the increases have occurred since the start of 2021, and supply has been unable to keep up with “rapid demand growth.”
“There is growing concern in the industry regarding another bout of project postponements as higher costs induce project owners to delay construction,” Mr. Basu said. “With the global economy steadily reopening, central banks continuing to pump up money supply, governments engaging in deficit spending and supply chain disruptions persisting, contractors can expect significant price pressures for months to come.”
The inflationary reports came a day after the Labor Department reported that prices for consumer goods and services rose in April at the fastest pace since 2008.
Congressional Republican leaders are citing inflation concerns as a reason to reject President Biden’s proposed tax increases on businesses and wealthier individuals.