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October 2022 | Vol. 11 / No. 7

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Exploring price increases in 2021 and previous periods of inflation

Exploring price increases in 2021 and previous periods of inflation
By Edwin Bennion, Trevor Bergqvist, Kevin M. Camp, Joseph Kowal, and David Mead
Measures of price change in the United States recently experienced the largest period of inflation since 2008.
How did the latest bout of price increases compare to previous periods of inflation? In 2021, large and
consistent price increases impacted a variety of products across the global economy. 1 The factors contributing
to these increases were the ongoing complications from the COVID-19 pandemic and supply chain disruptions.
In 2021, a semiconductor shortage caused decreased production in a variety of industries. A related factor was
port congestion caused by an inability to offload ships and secure trucking services. 2 The resulting delays in
product delivery translated to substantial supply shortfalls and upward price pressure. Data from the Bureau of
Labor Statistics (BLS) provide more detail on the nature of rising prices in 2021.
BLS tracks price changes via price surveys including the Consumer Price Index (CPI), the Producer Price Index
(PPI), and the Import and Export Price Indexes (MXPI). The CPI measures changes in prices paid by urban
U.S. residents for goods and services, tracking inflation at the retail level to consumers. By contrast, the PPI
publishes changes in the prices U.S. producers receive for selling their goods and services—that is, inflation
from the seller’s perspective. Finally, the MXPI describes inflation at the international level, measuring price
changes for goods and services traded between the United States and other countries worldwide.
This Beyond the Numbers article examines the 2021 CPI, PPI, and MXPI price increases in the context of
historical periods of high inflation, as measured by the surveys. Finally, the data are examined to explore
whether trends from the previous year continued into the first quarter of 2022.

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Why inflation matters

during the COVID-19 pandemic

Inflation is often called the “silent thief” because price increases over time leave people with less disposable
income (so long as price inflation surpasses wage inflation). To see how, take the example of hypothetical
consumer Sam detailed in table 1. Sam made $5,000 a month in 2020. In that year, Sam had monthly expenditures of $200 on gasoline; $500 on food;
$1,500 on rent; and $2,300 on items other than food, shelter, and energy. At the end of the month, the $500 left over from Sam’s expenses went into
savings.

Table 1. Example of the impact of inflation on individual expenditures
Good

2020 average consumption
by month

Total

Change in the CPI from December 2020
to December 2021

2021 average consumption
per month

$5,000

–

$5,327

Gasoline

$200

49.6%

$299

Food

$500

6.3%

$532

Rent

$1,500

3.3%

$1,550

$2,300

6.4%

$2,447

$500

–

$500

All items other than food,
shelter, and energy
Savings

Note: All changes in CPI data are drawn from the Bureau of Labor Statistics. All else is author's calculations based on CPI data from the U.S. Bureau of
Labor Statistics.
Dash indicates that data is not available.
Source: U.S. Bureau of Labor Statistics.
From December 2020 to December 2021, gasoline prices rose nearly 50 percent, food prices rose 6.3 percent, and rent prices rose 3.3 percent. Prices for
items other than food, shelter, and energy advanced 6.4 percent. As a result, to consume the same amounts of each, Sam would need to set aside an
additional $327.40 of total income. The outcome would be manageable if wages increased by about 6.6 percent, enough to cover the additional costs. But
wages typically do not keep up with inflation.
According to other BLS data, from December 2020 to December 2021, average wages and salaries for civilian employees rose 4.5 percent. 3 In other words,
wages advanced in 2021, but not as much as Sam’s market basket in the example. A 4.5-percent advance in wages for Sam would equate to a new average
monthly salary of $5,225. Because of the rise in price levels, Sam has to make some choices. One option would be to cut other discretionary spending. For
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example, Sam could stay home instead of going to the movies. Alternatively, Sam might reduce monthly savings. Another possibility might be to change the
composition of food consumption. In contrast to meat prices, which rose 14.8 percent, fresh vegetable prices only increased 2.4 percent in 2021. Sam could
substitute more fresh vegetables in place of meat. Regardless, the increase in price level forces Sam to make changes in consumption patterns.

Consumer Price Index inflation: 1970–2021
The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of goods and
services. For example, the June 2022 value for the CPI all items index was 296.311. Compared to the index value in June 2021 of 271.696, consumer prices
rose 9.1 percent over the period. Since 1970, there have been four notable periods of high inflation as tracked by the CPI. Each period coincided with a global
shift in either the supply or demand of oil, which consequently impacted the 12-month percent change of the CPI.

Table 2. Peak 12-month percentage change during periods of high inflation, CPI-U, U.S. city average
Period

All Items

Energy

Food

All Items Less Food and Energy

1973–76

12.3 (Dec. 1974)

33.7 (Sep. 1974)

20.3 (Dec. 1973)

11.7 (Feb. 1975)

1977–82

14.8 (Mar. 1980)

47.1 (Mar. 1980)

13.1 (Feb. 1979)

13.6 (Jun. 1980)

2005–08

5.6 (Jul. 2008)

34.8 (Sep. 2005)

6.3 (Oct. 2008)

2.9 (Sep. 2006)

7.0 (Dec. 2021)

33.3 (Nov. 2021)

6.3 (Dec. 2021)

5.5 (Dec. 2021)

2021

Source: U.S. Bureau of Labor Statistics.
2021
Consumer prices increased throughout 2021 in all four of the major indexes analyzed in this paper: all items, energy, food, and all items less food and energy.
As shown in table 2, the all items index reached a 7.0-percent 12-month rate of change in December 2021, which was then the largest recorded 12-month
advance since rising 7.1 percent in June 1982. Food prices followed suit, increasing a substantial 6.3 percent in December 2021—the highest since October
2008.
Energy, a historically volatile category, also advanced considerably in 2021. Following a period of deflation in 2020, the energy peak of 33.3 percent in
November 2021 was the 15th largest in the history of CPI (since 1970) and the largest since September 2005. The swing from price decreases in 2020 to high
inflation in 2021 primarily arose from the COVID-19 pandemic. Pandemic lockdowns in 2020 caused the largest demand-side shock to petroleum since the
2008–09 global recession. 4 Reduced economic activity sharply lowered petroleum demand and led to a decrease in global prices at the beginning of 2020.
However, after COVID-19 restrictions ended and demand recovered, prices rose again.

Chart 1. Twelve-month percent change of the Consumer Price Index in U.S. city average, all urban
consumers, not seasonally adjusted
Energy

Food

All items

All items excluding food and energy

Percent change
60

40

20

0

-20

-40
1970

1975

1980

1985

1990

1995

2000

2005

2010

2015

2020

Click legend items to change data display. Hover over chart to view data.
Source: U.S. Bureau of Labor Statistics.

View Chart Data
The elevated inflation of 2021 is put into perspective when analyzing previous periods of inflation in the CPI. Taking this into consideration, here is a brief look
at three historical periods of high inflation.

CPI: Comparing 2021 to previous periods
1973–76
In 1973, the Organization of Petroleum Exporting Countries (OPEC) instituted an oil embargo on the United States. This embargo resulted in a strong shock to
the supply side of U.S. energy, causing a period of high inflation as seen in the CPI. 5 During this period, several categories of the CPI reached higher levels
than their 2021 counterparts. The energy index of the CPI peaked in September of 1974 with a 33.7-percent increase, just larger than the 33.3-percent
increase in the energy index in 2021. Likewise, the food and all items categories peaked in December 1973 with 20.3-percent and 12.3-percent 12-month
changes, respectively. The rise over the previous year is over three times larger than the largest CPI increase in 2021 for food and 5 percentage points higher
than 2021’s largest annual change for all items. The December 1973 20.3-percent increase for food was the all-time highest on record for food inflation, a
record still currently standing nearly 50 years later. 4 years later, a second oil crisis would follow and bring an acceleration of the inflation occurring in the
early 1970s. 6
1977–82
The 1979 Oil Crisis resulted from lower domestic crude oil production, instability in the Middle East, and a cut in crude oil production by OPEC. From 1977 to
1982, inflation, as measured by the CPI, hit historic highs. Specifically, the all items, energy, and all items less food and energy indexes reached all-time highs
during this period.
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Energy reached a record high 12-month change of 47.1 percent in March 1980. An all-time peak came the same month for the all items category, rising 14.8
percent on a 12-month basis. All items less food and energy also rose to an all-time peak of 13.6 percent a few months later in June 1980. Food did not reach
its highest ever peak during this period, but still increased substantially. In fact, the 12-month change of 13.1 percent in February 1979 was the largest
advance for food outside of the 1973–76 period of high inflation.
2005–08
Although prices rose more moderately between 2005 and 2008 compared with the other periods discussed in this paper, the energy index recorded significant
inflation. In September 2005, the energy index increased 34.8 percent, a percent change larger than any energy index increase recorded in 2021 and an
advance not seen since April 1980. Following this peak, the 12-month percent change in energy prices trended high until the middle of 2006. After briefly
remaining stable, energy prices rose substantially on a 12-month basis from October 2007 to October 2008, before falling shortly thereafter. Even though food
inflation remained lower than in the 1970s and 1980s, starting in June 2007, it rose sharply, peaking at 6.3 percent in October 2008. In all, the volatility of
energy and food prices during this period resulted from the simultaneous oil shock and financial crisis of 2007–08. 7
The different effects of the two events are reflected in their relatively isolated impact on the prices for different types for goods. Specifically, the peak 12month change for the all items index was 5.6 percent in July 2008. By contrast, the all items less food and energy index did not experience the same
pronounced inflation faced by energy during this period. All items less food and energy peaked around 2 years earlier in September 2006, at a much lower 2.9
percent. After removing energy and food, the peak 12-month change for the all items index substantially decreased. Following shocks to oil, energy prices
change rapidly. Energy’s role as a major input to food production means food prices will usually follow suit after a delay; nonetheless, consumer food prices
were impacted rapidly enough in the late 2000s to experience inflation before the financial crisis. The all items less food and energy index likely did not reflect
significant inflation because the financial crisis hit before other consumer prices could be impacted by the shocks to oil in this period. 8

Table 3. Ten highest 12-month percentage change values in energy, CPI-U
Month

Energy

Mar-80

47.1

Feb-80

46.6

Apr-80

43.5

Jan-80

41.5

May-80

39.3

Dec-79

37.5

Nov-79

36.2

Oct-79

35.7

Sep-79

35.3

Sep-05

34.8

Sep-74

33.7

Source: U.S. Bureau of Labor Statistics.

Producer Price Index: 1973–2001
The Producer Price Index (PPI) is a measure of the average change over time in the prices domestic producers receive for their output. The PPI Final
Demand-Intermediate Demand (FD-ID) aggregation system was introduced in 2014. The FD-ID system includes 12-month percent change data for the final
demand goods index going back to November 2010. The FD-ID system superseded the Stage of Processing (SOP) system, which included the finished goods
PPI as its main index. The PPI for finished goods, a component of final demand goods with similar product categories, provides index data going back to the
1940s. 9
2021
The runup to 2021 included volatile movements in producer prices. Producer prices in 2020 saw a steep drop through April, then a subsequent reinflation of
prices by the end of the year. In 2021, material-input supply disruptions related to the COVID-19 pandemic, logistical distribution issues, and labor shortages
came into force. By the end of 2021, 12-month inflation rates for final demand and its major components—final demand goods, final demand services, and
final demand construction—had reached or come close to record highs. 10 Chart 2 shows that the 12-month increase for final demand goods was 13.4
percent in 2021. Finished goods prices advanced 12.3 percent during that period. Price movements for this pair of PPIs generally paralleled each other during
the earlier years of overlapping index calculation. Given their similar courses, the remainder of the PPI section of this article uses the index for finished goods
and its component indexes to analyze producer inflation for goods going back to the 1970s. 11 (See table 4.)

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Chart 2: Producer price indexes for finished Goods and final demand goods, 12-month percent
change for December, 2010–21
Finished goods

Final demand goods

Percent change
15

10

5

0

-5
2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

Click legend items to change data display. Hover over chart to view data.
Source: U.S. Bureau of Labor Statistics.

View Chart Data

Table 4. Peak inflation rates for the Producer Price Index Finished Goods Index and its major component indexes for major
inflation events since 1970, 12-month rates of change
Index

1973–75

Finished goods

1978–81

2007–08

2021

19.6

14.9

9.9

13.3

Finished consumer foods

28.8

12.8

8.8

12.3

Finished goods, excluding foods

21.9

18.4

10.1

14.0

44.2[1]

73.6

28.6

45.4

17.7

12.2

4.7

6.5

Finished consumer energy goods
Finished goods excluding foods and energy

[1] This index began in January 1974, with 12-month percent change data available back to January 1975. Inflation for refined petroleum products was

nearly 90 percent in late 1974.
Source: U.S. Bureau of Labor Statistics.

PPI: Comparing 2021 to previous periods
1973–75
The period from 1973 to 1975 recorded the highest level of producer inflation observed over the last half century. Two major economic events defined this
period: the wage-price spiral of the early 1970s and the OPEC oil embargo of 1973. 12 Food prices increased on a broad basis, encompassing unprocessed
goods such as grains, livestock, slaughter poultry, and raw milk. These price increases passed through to finished consumer foods such as cereals, meats,
processed poultry, and dairy products. Food inflation accelerated beginning in early 1973 and crested in August. Starting in mid-to-late 1973 and continuing
through the peak 12-month increase of 19.6 percent in November 1974, finished goods inflation moved even higher. The acceleration in 1974 was led by
higher prices for finished consumer energy goods and for finished goods excluding foods and energy. In response to the oil embargo, the 12-month rate of
inflation for refined petroleum products rose to nearly 90 percent by late 1974. 13 (See chart 3.)

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Chart 3. Producer Price Indexes for finished goods, finished consumer foods, and finished goods
excluding foods, 12-month percent change for December, 1970–2021
Finished goods

Finished consumer foods

Finished goods excluding foods

Percent change
30

20

10

0

-10
1970

1975

1980

1985

1990

1995

2000

2005

2010

2015

2020

Click legend items to change data display. Hover over chart to view data.
Source: U.S. Bureau of Labor Statistics.

View Chart Data
1978–81
The period from 1978 through 1981 brought more inflation as measured by the PPI. As with consumer prices around this time, producer prices were heavily
impacted by the 1979 Oil Crisis. Finished consumer energy goods inflation spiked 73.6 percent in the 12 months ended March 1980, dwarfing 12-month
increases in finished consumer energy prices in other periods. Similarly, the 12-month percent change for finished goods reached a high of 14.9 percent in
August 1980, an increase larger than any other period aside from 1973–75. This bout of high inflation lingered until early 1982.
2007–08
The surge in inflation in 2007 and 2008 arose primarily from higher prices for food and energy products. Peak inflation during this period occurred in July
2008, as prices for finished goods, finished consumer foods, and finished consumer energy goods rose at 12-month rates of 9.9 percent, 8.8 percent, and
28.6 percent, respectively. The acceleration in energy and food inflation can be traced to supply-side issues: a reduction in OPEC production and a weatherinduced surge in grain prices that impacted the markets for prepared animal feeds, meats and poultry, and dairy products. 14 The inflationary spike ended
abruptly with the onset of the 2008 financial crisis, which dominated economic and financial events in the latter half of that year.

Import and Export Price Index Movements: 1987–2021
The import and export price indexes (MXPI) measure changes in the prices for goods imported to and exported from the United States. The indexes only date
back to the early 1980s, and as such do not capture the high-inflation periods in the 1970s reflected in the CPI and PPI. The all-import index was first
published in December 1982, followed by the first all-export index in December 1983. The data in chart 4 for imports and chart 5 for exports date back to
1985, the first year of publication for fuel data.

Chart 4. Import Price Indexes for all commodities, food, and fuel, 12-month percent change for
December, 1985–2021
All Imports

Percent change

Food

Fuel

150

100

50

0

-50

-100
1985

1990

1995

2000

2005

2010

2015

2020

Click legend items to change data display. Hover over chart to view data.
Source: U.S. Bureau of Labor Statistics.

View Chart Data

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Chart 5. Export Price Indexes for all commodities, food, and fuel, 12-month percent change for
December, 1985–2021
All exports

Percent change

Food

Fuel

75

50

25

0

-25

-50
1985

1990

1995

2000

2005

2010

2015

2020

Click legend items to change data display. Hover over chart to view data.
Source: U.S. Bureau of Labor Statistics.

View Chart Data

2021 
Mirroring trends seen in the CPI and PPI indexes, the first year of the COVID-19 pandemic was marred with falling export and import prices amid economic
lockdowns before seeing a large rebound when the economy reopened in 2021. Much like the consumer and producer price indexes, import and export price
indexes rose sharply in 2021. The increases followed a volatile 2020. Throughout the year, prices fell markedly amid COVID-19 economic lockdowns, then
rose as the year progressed when the economy reopened. The index for overall import prices increased 10.3 percent on a 12-month basis in December 2021,
advancing in 10 out of 12 months for the year. Export prices also increased, rising 14.9 percent for the 12 months prior to December 2021. In the 12 months
prior to October 2021, the increase was higher: over 18 percent. The 2021 increase in export prices was the largest calendar-year advance on record. The
primary reason was an increase in crude petroleum prices. From 1975 to 2015, U.S. exporters were prohibited from exporting crude petroleum. Since the
ban’s end in late 2015, crude exports grew to 8.63 billion dollars in 2021. 15 From December 2020 to December 2021, import and export fuel prices advanced
60.9 percent and 59.4 percent, respectively. Over the same period, import and export prices for foods, feeds, and beverages were up 13.7 percent and 20.2
percent, respectively. 

MXPI: Comparing 2021 to previous periods
1987–88
The first time that U.S. import prices rose in double digits over a calendar-year was a 10.0-percent advance from December 1986 to December 1987. The
magnitude of the increase was unique to import prices and was driven by a sharp drop in the value of the U.S. dollar. Just prior to this period, between
January 20, 1981, and a peak on September 11, 1985, the U.S. dollar rose 41.1 percent against a broad base of major currencies. 16 This made imports more
affordable, contributing to a rise in the total value of imports and the largest trade deficit in U.S. history up to that point. 17
In September 1985, the financial leaders from the G5 (France, Japan, the United Kingdom, the United States, and West Germany) met and ratified what
became known as the Plaza Accord. The Plaza Accord was an agreement that the five national banks would intervene to devalue the U.S. dollar to raise
import prices and reduce the U.S. trade deficit. 18 The first part of the plan was successful. The U.S. dollar fell 34.0 percent from the September 1985 peak to
the end of 1988. That, in turn, led to a rise in import prices starting in 1987 and continuing through 1990. The policy had limited impact on the trade deficit;
the value of U.S. exports rose, but import trade remained robust despite the higher prices. In contrast, the value of the U.S. dollar had little impact on import
or export prices in 2021. Rather than rising as in 1981, the U.S. dollar fell 4.2 percent from the start of the pandemic on March 13, 2020, to the end of
2021. 19
2007–08
In 2007 and 2008, export and import prices advanced sharply, driven by rising prices for agricultural commodities and fuels. A reduction in oil production by
OPEC member states as well as a tight global market for grains contributed to inflation during this period. Increases in import prices reached a record high of
21.4 percent for the 12 months prior to July 2008. In the same period, the prices for import foods, feeds, and beverages rose 15.7 percent. Prices for overall
exports reached a high of 10.2 percent for the 12 months ended in July and export prices for food, feeds, and beverages increased 41.8 percent. All four
increases set records at the time. Fuel prices, as measured by the MXPI, also increased to substantially high levels in 2008. In July, import and export fuel
prices advanced at 12-month rates of 75.2 percent and 53.9 percent, respectively. Shortly thereafter, prices declined with the onset of the 2008–09 Great
Recession. Prices for imports and exports would not rebound until 2011 and 2010, respectively.

Patterns of inflation since 1973
Analyzing data from each BLS price survey reveals similar patterns of inflation throughout historical timeframes. During the mid-1970s, both the CPI and PPI
indexes showed high rates of inflation. As prices for raw food advanced sharply on a 12-month basis in 1973, the producer side of the market faced
substantial inflation. The producer price increases generated inflation in finished food prices for consumers later in the year. Then, higher oil prices drove both
indexes upward through 1975. A few years later, in the late-1970s, oil prices once again drove increases in the CPI and PPI indexes. Chart 6 shows 12-month
price increases across all the price indexes. As the chart shows, in 2007 and 2008, import prices experienced inflation the earliest. Finally, higher energy
prices led inflation across all BLS indexes in 2021, with producer and export price advances outpacing those for import and consumer prices.

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Chart 6. Consumer Price Index, Producer Price Index, and Import and Export Index for all
commodities, 1970–2021, 12-month percent changes by month
CPI

PPI

Import

Export

Percent change
30

20

10

0

-10

-20

-30
Jan-70

Jan-75

Jan-80

Jan-85

Jan-90

Jan-95

Jan-00

Jan-05

Jan-10

Jan-15

Jan-20

Click legend items to change data display. Hover over chart to view data.
Source: U.S. Bureau of Labor Statistics.

View Chart Data

Price trends continuing in early 2022
The 2021 trend of price increases persisted in early 2022. Global events contributed to continued increases in import, export, producer, and consumer prices
as evidenced by BLS indexes. Renewed lockdowns in China amid further COVID-19 outbreaks factored into the price advances. Economic sanctions imposed
in the first quarter of 2022 also impacted commodity prices worldwide. Given the importance of Russian energy exports, uncertainty surrounding the country’s
invasion of Ukraine resulted in price advances for crude oil and natural gas. Wheat and corn, other substantial exports from the region, also recorded price
increases in the first quarter of 2022. 20 The resulting restrictions on production put more burden on global supply chains, impacting production of everything
from automobiles to computer chips. 21
Data from 2021 and early 2022 indicate a global economy impacted by continued spillover effects from the COVID-19 pandemic, as well as new geopolitical
issues. The ongoing strain on global supply chains translated to persistent upward price pressure across various goods and industries. Remaining to be seen is
how persistent inflation will be as the economy continues to reopen and supply chain disruptions abate.
This Beyond the Numbers article was prepared by David Mead, a supervisory economist in the Information and Analysis Section, Edwin Bennion and Kevin
M. Camp, economists in the Information and Analysis Section, Trevor Bergqvist, an economist in the Index CW and SP Section, and Joseph Kowal, an
economist in the office of Index Analysis and Public Information, Bureau of Labor Statistics. For more information, you can reach out to the authors by email
at Bennion.Edwin@bls.gov, Bergqvist.Trevor@bls.gov, Camp.Kevin@bls.gov, Kowal.Joseph@bls.gov, or Mead.Dave@bls.gov. Alternatively, they can be reached
by phone. Edwin Bennion can be reached at 202-691-7142, Kevin Camp at 202-691-7166, Joseph Kowal at 202-691-7706, and Dave Mead at 202-691-7154.

SUGGESTED CITATION:

Edwin Bennion, Trevor Bergqvist, Kevin M. Camp, Joseph Kowal, and David Mead, “Exploring price increases in 2021 and previous periods of inflation,” Beyond the Numbers: Prices &
Spending, vol. 11, no. 7 (U.S. Bureau of Labor Statistics, October 2022), https://www.bls.gov/opub/btn/volume-11/exploring-price-increases-in-2021-and-previous-periods-ofinflation.htm

Notes

Notes
1

“Consumer Price Index: 2021 in Review,” TED: The Economics Daily (January 14, 2022) https://www.bls.gov/opub/ted/2022/consumer-price-index-2021-in-review.htm

Ogden, Ryan, “How did the COVID-19 pandemic affect input costs for U.S. producers? A review based on BLS input cost indexes,” Beyond the Numbers (December 2021)
https://www.bls.gov/opub/btn/volume-10/how-did-the-covid-19-pandemic-affect-input-costs-for-us-producers.htm
2

Daniel Howley, “These 169 industries are being hit by the global chip shortage,” Yahoo Finance, April 25, 2021, https://finance.yahoo.com/news/these-industries-are-hit-

hardest-by-the-global-chip-shortage-122854251.html and https://www.wsj.com/articles/everywhere-you-look-the-global-supply-chain-is-a-mess-11616019081.
3

Employment Cost Index News Release Table 8. Employment Cost Index for wages and salaries, for civilian workers, by occupational group and industry. U.S. Bureau of

Labor Statistics. January 28, 2022. https://www.bls.gov/news.release/archives/eci_01282022.htm.
4

Kevin Camp, David Mead, Stephen Reed, Christopher Sitter, and David Wasilewski, “From the barrel to the pump: the impact of the COVID-19 pandemic on prices for

petroleum products,” Monthly Labor Review (October 2020) https://www.bls.gov/opub/mlr/2020/article/from-the-barrel-to-the-pump.htm.
5

U.S. Department of State: Office of the Historian. “Oil Embargo, 1973–1974.” Milestones: 1969-1976, no date. https://history.state.gov/milestones/1969-1976/oil-embargo.

6

Memorandum by Secretary of Energy Schlesinger to President Carter, January 4, 1979, Foreign Relations of the United States, 1969-1976, Volume XXXVII, Energy Crisis,

1974–1980, Document 181, Department of State: Office of the Historian,. https://history.state.gov/historicaldocuments/frus1969-76v37/d181: This source details a
memorandum from the Secretary of Energy to President Carter during the 1979 Oil Crisis. In this memorandum, Secretary Schlesinger emphasizes the impacts of the oil
embargo on the supply side of the economy.

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Exploring price increases in 2021 and previous periods of inflation : Beyond the Numbers: U.S. Bureau of Labor Statistics

Hamilton, James D. “Causes and Consequences of the Oil Shock of 2007–08,” Brookings Papers on Economic Activity, (Spring 2009), pp. 215–283,

https://www.brookings.edu/wp-content/uploads/2016/07/2009a_bpea_hamilton-1.pdf.
8

The Investopedia Team, “Were There Any Periods of Major Deflation in U.S. History?,” Investopedia, February 14, 2022,

https://www.investopedia.com/ask/answers/040715/were-there-any-periods-major-deflation-us-history.asp.
9

The indexes belonging to the prior PPI main aggregation model, the Stage of Processing (SOP) system, were incorporated into the FD-ID system and provide additional

historical data. For the purpose of comparing the rise in producer prices in 2021 with prior periods of higher inflation, SOP indexes for finished goods and its components are
analyzed. The PPI for finished goods constitutes about 64 percent of final demand goods. The remaining components of final demand goods include government purchased
goods (about 11 percent of final demand goods) and goods for export (about 25 percent of final demand goods). Many of the individual products included in finished goods are
also components within the indexes for government purchased goods and goods for export. With that said, the broader definition of final demand goods relative to finished
goods means that some products, specifically those with more volatile price movement histories, are more highly weighted within the category for final demand goods. Some
examples of highly weighted goods for government purchase and for export include: diesel fuel, jet fuel, basic organic chemicals, carbon steel scrap, steel mill products,
oilseeds, drugs and pharmaceuticals, communications equipment, and aircraft/aircraft equipment.
10

The PPI Final-Demand-Intermediate Demand (FD-ID) aggregation system was introduced in January 2014 with index data going back to November 2009. Most FD-ID

indexes include 12-month percent change data going back to November 2010. For more information, visit https://www.bls.gov/ppi/fd-id/. To obtain PPI 12-month percent
change data for Final Demand, Final Demand Goods, Final Demand Services, and Final Demand Construction link to
https://data.bls.gov/timeseries/wpufd4%26output_view=pct_12mths?from_year=2010, https://data.bls.gov/timeseries/wpufd41%26output_view=pct_12mths?from_year=2010,
https://data.bls.gov/timeseries/wpufd42%26output_view=pct_12mths?from_year=2010, and https://data.bls.gov/timeseries/wpufd43%26output_view=pct_12mths?
from_year=2010.
11

To obtain PPI 12-month percent change data back to the 1970s for Finished Goods, Finished Consumer Foods, Finished Goods Excluding Foods, Finished Consumer

Energy Goods, and Finished Goods Excluding Foods and Energy see:
https://data.bls.gov/timeseries/wpufd49207%26output_view=pct_12mths?from_year=1970, https://data.bls.gov/timeseries/wpufd4111%26output_view=pct_12mths?
from_year=1970, https://data.bls.gov/timeseries/wpufd49209%26output_view=pct_12mths?from_year=1970,
https://data.bls.gov/timeseries/wpufd4121%26output_view=pct_12mths?from_year=1970, and https://data.bls.gov/timeseries/wpufd4131%26output_view=pct_12mths?
from_year=1970.
12

In the early-to-mid 1970s, the United States government attempted to use wage and price controls to combat rising rates of inflation that were attributed to a so-called

wage-price spiral. In retrospect, these efforts are widely perceived as having exacerbated the inflation situation. When “Phase-3” price controls were lifted in mid-summer
1973, the monthly rate of inflation for the All Commodities PPI surged 5.8 percent in August, at that time the largest over-the-month advance since 1946. That rise in the All
Commodities PPI has not been matched since then. (See https://data.bls.gov/timeseries/wpu00000000%26output_view=pct_1mth?from_year=1946.) For more information,
see Poole, William, “Wage-Price Controls: Where Do We Go from Here,” Brookings Papers on Economic Activity, no. 1 (1973), pp. 285-299, https://www.brookings.edu/wpcontent/uploads/1973/01/1973a_bpea_poole.pdf.
13

PPI data for crude petroleum are available at https://data.bls.gov/timeseries/wpu0561%26output_view=pct_12mths?from_year=1970. PPI data for refined petroleum

products are available at https://data.bls.gov/timeseries/wpu057%26output_view=pct_12mths?from_year=1970. 
14

Joseph Kowal, Antonio Lombardozzi, Scott Sager, and William Snyders, “Producer inflation accelerates in 2007 due to rising prices for energy and foods.” Monthly Labor

Review (July 2008), https://www.bls.gov/opub/mlr/2008/07/art1full.pdf. Joseph Kowal, William Snyders, Antonio Lombardozzi, and Lana Borgie, “Producer prices reverse
course in 2008,” Monthly Labor Review (July 2009), https://www.bls.gov/opub/mlr/2009/07/art2full.pdf.
15

U.S. Energy Information Association. “Frequently Asked Questions (FAQS): How much petroleum does the United States import and export? ” (March 9, 2022).

https://www.eia.gov/tools/faqs/faq.php?
id=727&t=6#:~:text=In%202021%2C%20the%20United%20States%20exported%20about%208.63%20million%20b,gross%20petroleum%20exports%20in%202021.
16

Data on U.S. dollar levels relative to other major currencies were drawn from the St. Louis Federal Reserve’s Nominal Major Currencies U.S. Dollar Index.

https://fred.stlouisfed.org/series/DTWEXM. Note that this series has been discontinued but historical data is still available.
17

Data on U.S. Merchandise trade balance are drawn from the St. Louis Federal Reserve’s Balance on Merchandise Trade dataset.

https://fred.stlouisfed.org/series/BOPBMN. Note that this series has been replaced. Of note, even though the U.S. Trade Deficit hit a record high in 1985, that mark has been
far surpassed in subsequent years.
18

Kenneth N Gilpin, “The Dollar's Wild Ride,” New York Times, June 19, 1998, https://www.nytimes.com/1988/06/19/business/the-dollar-s-wild-ride.html.

19

Data on Nominal U.S. dollar values are taken from the Federal Reserve’s “Nominal Broad U.S. Dollar Index” https://fred.stlouisfed.org/series/DTWEXBGS.

20

Ira Kalish, “How Sanctions Impact Russia and the Global Economy,” Deloitte, March 15, 2022, https://www2.deloitte.com/us/en/insights/economy/global-economic-impact-

of-sanctions-on-russia.html.
21

Keith Bradsher, “China’s Covid Lockdowns Set to Further Disrupt Global Supply Chains,” New York Times, March 15, 2022,

https://www.nytimes.com/2022/03/15/business/covid-china-economy.html.

Publish Date: Friday, October 28, 2022

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Washington, DC 20212-0001
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