Producer price surge fuels inflation fears

Inflation worries got another boost Thursday after a report showed the biggest year-over-year jump in U.S. producer prices in more than a decade.

The Producer Price Index surged 6.2 percent in the 12 months through April.

Massive fiscal stimulus and improving public health have combined to spark a boom in demand that's outstripping supply - resulting in a pick-up in inflation.

Prices were higher across the board with the biggest jump tied to the services side of the economy.

There were also signs of building price pressures in the manufacturing pipeline with steel mill products, plastics, lumber and animal feeds all posting notable price gains.

The report comes amid a growing number of warnings from CEOs who say they are seeing a broad-based rise in input costs.

And on top of figures released Wednesday that showed consumer prices surged in April by the most in nearly 12 years.

Meanwhile, the price of labor, the largest cost for most U.S. companies, is going up as employers compete to attract new workers needed for a re-opening economy.

McDonald's announced Thursday that is is raising wages at company-owned restaurants by an average of 10 percent. The starting pay rate for entry level crew is going up to a range of $11 to $17 an hour.

At the same time, Amazon wants to hire 75,000 workers at its fulfillment and logistics operations. It's offering an average starting pay of more than $17 an hour, a sign-on bonus of up to $1,000, and will give new hires with vaccination proof an extra $100.

Demand for hourly workers is on the rise as the economy re-opens but employers say they are struggling to fill open positions, with some claiming extra jobless benefits are too lucrative, forcing them to offer higher wages.

All the rising inflation puts focus now on the Federal Reserve - with some on Wall Street fearing the Fed may have to step in and raise interest rates sooner rather than later in order to prevent inflation from running out of control.

Video Transcript

- More inflation worries Thursday, after a report showed the biggest year-over-year jump in US producer prices in more than a decade. The Producer Price Index surged 6.2% in the 12 months through April.

Massive fiscal stimulus and improving public health have combined to spark a boom in demand that's outstripping supply, resulting in a pickup in inflation. Prices were higher across the board, with notable gains in the manufacturing pipeline for steel mill products, plastics, lumber, and animal feeds.

The report comes amid a growing number of warnings from CEOs who say they are seeing a broad-based rise in input costs. And on top of figures released Wednesday that showed consumer prices surged in April by the most in nearly 12 years.

Meanwhile, the price of labor, the largest cost for most US companies, is going up as employers compete to attract new workers needed for a reopening economy. McDonald's announced Thursday that it is raising wages at company-owned restaurants by an average of 10%. The starting pay rate for entry-level crew is going up to a range of $11 to $17 an hour.

At the same time, Amazon wants to hire 75,000 workers at its fulfillment and logistics operations. It's offering an average starting pay of more than $17 an hour, a sign-on bonus of up to $1,000, and will give new hires with vaccination proof an extra $100.

Demand for hourly workers is on the rise as the economy reopens, but employers say they are struggling to fill open positions, with some claiming extra jobless benefits are too lucrative, forcing them to offer bigger paychecks.

The rise in inflation puts focus on the Federal Reserve, with some on Wall Street fearing the Fed may have to step in and raise interest rates sooner rather than later in order to prevent inflation from running out of control.