Inflation hovers at 9.7% in producer index, right near highest on record

Producer prices increased a staggering 9.7% for the year ending in January, according to a report on producer costs by the Bureau of Labor Statistics — meaning inflation hovered near the highest pace on record.

The high numbers in Tuesday’s producer price index report eclipsed predictions by forecasters and are near the highest in the gauge's 11-year history after the PPI rose by 9.8% in December.

The news came just days after a report for the month of January found consumer prices increased by 7.5% — the fastest annual rate in four decades. The inflationary pressures are adding to President Joe Biden’s mounting political concerns heading into the midterm elections.

The PPI gauges the wholesale prices of goods, which are inevitably passed down to consumers.

Over the past month, producer prices have increased by 1%, double the consensus expectations of a 0.5% jump.

Tuesday’s report will put fire to the feet of Federal Reserve officials who are planning to hike interest rates for the first time in years as early as next month in a scramble to contain inflation.