Monday Economic Report: Year-Over-Year Consumer Price Growth Was Fastest in Three Decades

AICC, through its membership in the Council of Manufacturing Associations, is pleased to present the "Monday Economic Report" from the NATIONAL ASSOCIATION OF MANUFACTURERS (NAM).

By Chad Moutray, Ph.D., CBE –November 15, 2021

NAM Economic Toplines:

• Consumer prices soared 0.9% in October, the fastest pace since June, which was the fastest pace since June 2008. Food and energy costs rose 0.9% and 4.8%, respectively, in October. Excluding food and energy, core consumer prices increased 0.6% in October, also the biggest increase since June. The cost of used cars and trucks jumped 2.5% for the month, with prices for new vehicles up 1.4%. Costs were largely higher across the board.

• The consumer price index has risen 6.2% over the past 12 months, up from 5.4% in September and the fastest year-over-year pace since December 1990. At the same time, core inflation (which excludes food and energy) increased 4.6% year-over-year in October, up from 4.0% in the prior release and the biggest increase since September 1991.

• Similarly, producer pricesfor final demand goods and services rose 0.6% in October, continuing to increase steadily year to date. Over the past 12 months, producer prices for final demand goods and services jumped 8.6%, the same pace as in September and remaining the largest increase on record. Meanwhile, core producer prices increased 6.3% year-over-year in October, up from 6.0% in September and matching the record rate in August.

• The Index of Consumer Sentiment declined from 71.7 in October to 66.8 in November, the lowest level since November 2011, according to preliminary data from the University of Michigan and Thomson Reuters. The reduction was largely based on inflationary worries.

• The concern here is that the sharp reduction in consumer confidence since the spring will translate to some hesitance in terms of spending. Yet, the data on U.S. consumer credit outstanding would seem to suggest that Americans have stepped up their willingness to take on revolving credit, which should bode well for continued spending growth moving forward.

• Manufacturing job openings rose from 869,000 in August to 897,000 in September. These figures are not far from July’s record high (906,000), and job postings remain well above pre-pandemic levels. Job openings rose to an all-time high for durable goods firms and were not far from a record pace for nondurable goods businesses.

• In the larger economy, nonfarm business job openings pulled back for the second straight month from the record 11,098,000 seen in July, down to 10,629,000 in August and 10,438,000 in September.

• There were 7,674,000 unemployed Americans in September, which translates to 0.74 unemployed workers for every one job opening in the U.S. economy. That number speaks to the tightness of the labor market, with more job openings than people looking for work.

• Quits in the manufacturing sector increased from 312,000 in August to 337,000 in September, a new all-time high. Likewise, nonfarm payroll quits soared from 4,270,000 to a record 4,434,000.

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