Manufacturing businesses across the central Atlantic region in the U.S. are seeing record-shattering inflation, data from a survey from the Federal Reserve Bank of Richmond showed Tuesday.
The Fifth District Survey of Manufacturing Activity’s gauge of prices paid for materials and prices charged for products both moved dramatically higher in July, the fourth straight month of record-high readings for the price increases across the District of Columbia, Maryland, North Carolina, South Carolina, Virginia, and most of West Virginia.
Prices paid by manufacturers rose at an annualized pace of over 11 percent, the fastest in records going back to 1993. In June, manufacturers reported prices paid rising 8.57 percent.
Manufacturers raised the prices of their goods at an annualized pace of 6.93 percent, up from 4.7 percent a month ago. That too is the all-time fastest pace.
Even though Fed officials and the Biden Administration have insisted that the price hikes will be transitory, manufacturers in the region disagree. Expected inflation for prices paid rose to 5.63 from 5.02, near the historical high set in May. Expected prices increases for products rose to a pace of 4.98, also the highest on record.
The survey’s composite index came in at 27 in July, up from a revised 26 in June. The consensus forecast was for 21, which would have been a one-point decline from the preliminary reading for June.
The upward push in the index was fueled by increases in the shipments and employment indexes. New orders declined, suggesting that high prices may be forcing some buyers to delay.
The employment index soared to 36 in July from 23 in June, indicating increasing employment. Firms “struggled to find workers with the necessary skills,” a problem that manufacturers expected to continue in the next six months, according to the Richmond Fed said. The gauge of the difficulty companies are having finding skilled workers declined for the second consecutive month after hitting an all-time high in May.