By Nathalie Voit

The Producer Price Index (PPI), which measures price changes from the standpoint of U.S. producers (before goods and services are sold to consumers), rose 8.6% in October from a year earlier, matching last month’s record annual gain, according to data from the U.S. Department of Labor.

According to the report, producer prices increased 0.6% in October from September, increasing 0.1% from September. The report revealed that inflation at the wholesale level was driven by surging gasoline prices, which rose 6.7% in October.

Excluding volatile food and energy prices, prices for final demand goods rose 0.4% in October, up from 0.1% in September. On an annual basis, prices for final demand goods less food, energy, and trade services increased 6.2% last month.

Over 60% of last month’s increase in the index can be attributed to a 1.2 percent rise in prices for final demand goods, as opposed to services, the report revealed. Additionally, one-third of the rise in the October PPI was due to a surge in the price of wholesale gasoline, which jumped 6.7%.

The United States is currently experiencing unprecedented inflation levels as the country recovers from the Covid-19 pandemic and squeezed supply lines.

According to the Labor Department, the record pace of inflation last month is the highest in nearly 11 years.

“Since the pandemic, supply chains have never been the same and likely won’t normalize for several more months,″ Contingent Macro Advisors said in a research note.

Analysts at Goldman Sachs expect prices to get worse before they get better.

According to the global investment bank, core consumer prices are predicted to remain around the mid-5% range for “much of the winter” before moderating to 4% next summer and 3.2% at the end of 2022.

“The risks to our forecast are probably tilted to the upside,” the company acknowledged.

The Fed, once dismissive about long-term inflation, has admitted higher prices are here to stay.

“We see shortages and bottlenecks persisting into next year, well into next year,” Fed Chairman Jerome Powell told reporters during a press conference last week. “We see higher inflation persisting.”