We hear a lot about the consumer price index (CPI) when it comes to inflation. But there’s another number that’s important — that’s the producer price index (PPI) which measures inflation from the perspective of costs to industry or producers of products. Because it’s measuring the costs to the producers of the products before they get to the consumers, it’s often thought of as an earlier indication of where inflation is going than is the CPI.

Today, the news on the PPI numbers is not good.

Wholesale prices in November rose at the quickest pace on record, increasing 9.6 percent over the past 12 months, when it was estimated to be at 9.2 percent. That’s the biggest annual gain on record.

Producer Price Index (PPI) came in at 9.6% y/y, higher than the estimate of 9.2% and Oct's 8.8%. New record high. Strong increases across all categories. We started 2021 with PPI below 2% y/y and now we're nearly at 10%. pic.twitter.com/IhMz8iv0F0

— Liz Young (@LizYoungStrat) December 14, 2021

From CNBC:

Excluding food, energy and trade services prices rose 0.7% for the month, putting core PPI at 6.9%, also the largest gain on record. Estimates were for respective gains of 0.4% and 7.2%, meaning the monthly gain was faster than estimates but the year-over-year measure was a bit slower. [….]

Those numbers come with headline consumer prices running at their fastest pace in nearly 40 years and core inflation the hottest in about 30 years.

Demand for goods continued to be the bigger driver for producer prices, rising 1.2% for the month, a touch slower than the 1.3% October increase. Final demand services inflation ran at a 0.7% monthly rate, much faster than the 0.2% October rate and a sign that the services side could be catching up in prices after lagging through much of the recovery.

So Biden claiming that it’s transitory or it’s going away isn’t living in reality. Unfortunately, this indicates that it’s going to continue and likely to get worse because it’s still going up. But it’s another indicator of the cold hard facts that the Biden team doesn’t want to face.

It’s things like this that Sen. Joe Manchin (D-WV) is looking at when he’s trying to judge Biden’s Build Back Better bill, and this is going to make him even more concerned than he has been. He already said the numbers were “very sobering” yesterday and that was before the PPI came out.

Biden’s numbers on inflation were already horrifically bad, and this is only going to reinforce that to Americans.

According to the ABC/Ipsos poll taken between December 10-11, more than two in three — 69 percent of Americans — disapprove of Joe Biden’s handling of inflation, with only 28 percent approval — an incredibly low number. Fifty-seven percent disapproved of Biden’s handling of the economic recovery.

Inflation is hitting Americans hard, they’re laying it at Biden’s feet, and the PPI indicates that it’s just going to get worse.