A key metric of inflation at the wholesale level released on Tuesday, showed U.S Producer Price Inflation in October rose 8.6% from a year ago – its biggest annual jump on record in almost 11 years.
The economy’s strong rebound from the 2020 COVID-19 pandemic has caught many businesses by surprise. Their scramble to meet unexpectedly strong demand has created shortages of labour, raw materials and goods and ever-deepening bottlenecks at ports and freight yards. The result has been higher prices and an aggravating global supply squeeze that is expected to last well into 2023.
Looking ahead, traders have now shifted their attention to Wednesday’s Consumer Price Inflation reading for clues on the markets next big move. The reading is expected to show a gain of nearly 6%, which would be the largest year-over-year jump in consumer prices since the early 1990s.
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