Producer prices jump a record 9.6% in past year and more business news

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Producer prices jump 9.6% in past 12 months

Prices at the wholesale level surged by a record 9.6% in November from a year earlier, an indication of ongoing inflation pressures.

The Labor Department said Tuesday that its producer price index, which measures inflation before it reaches consumers, rose 0.8% in November after a 0.6% monthly gain in October. It was the highest monthly reading in four months.

Food prices, which had fallen 0.3% in October, jumped 1.2% in November. Energy prices rose 2.6% after a 5.3% percent rise October.

The 12-month increase in wholesale inflation set a new record, surpassing the old records for 12-month increases of 8.6% set in both September and October. The records on wholesale prices go back to 2010.

Core inflation at the wholesale level, which excludes volatile food and energy, rose 0.8% in November with core prices were up 9.5% over the past 12 months.

The increase in wholesale prices was widespread, led by a 1.2% increase in the cost of goods and a 0.7% rise in the price of services.

In the goods category, the price of iron and steel scrap rose 10.7% while the price for gasoline, jet fuel and industrial chemicals all moved higher. In the food category, the price of fresh fruits and vegetables rose while the price of chickens fell.

Kroger cuts benefits for the unvaccinated

Kroger, the country's biggest traditional grocery chain, is ending some benefits for unvaccinated workers as big employers attempt to compel more of their workforce to become vaccinated with cases of COVID-19 again rising.

Unvaccinated workers will no longer be eligible to receive up to two weeks paid emergency leave if they become infected, a company spokesperson confirmed Tuesday. That policy was put into place last year when vaccines were unavailable.

The company said it will also begin charging a $50 monthly fee to unvaccinated salaried workers and managers who are enrolled in a company health care plan. Unionized workers and non-union hourly workers won't be charged that fee.

Kroger has nearly 500,000 employees in the U.S.; 66% belong to a union. The company won't say what percent of its workers are vaccinated.

Airline labor shortage persists after assistance

American Airlines plans to hire 18,000 new employees in 2022 as it tries to staff up coming out of the COVID-19 pandemic, according to an advance copy of testimony that CEO Doug Parker plans to share with lawmakers Wednesday.

Parker and other airline CEOs are being called on to explain why airlines are struggling with labor shortages when Congress gave the industry $54 billion in 2020 and 2021 to survive the worst of the pandemic downturn.

American Airlines alone received more than $12.8 billion in government payroll support.

But Parker, in his prepared testimony, says government support to avoid layoffs and furloughs "saved the airline industry, which Congress and the administration recognized as critical infrastructure that is as essential to the economy as it is unique."

"Each time we add to our ranks, it's like a dividend payment on the investment made in our team through the PSP; instead of building back from collapse, we're growing to provide more promising careers in good-paying jobs to hard-working individuals who are the lifeblood of our nation's economy," Parker said.

Nebraska governor urges Kellogg's to resume talks

Kellogg's is facing increasing political pressure to resume contract talks with its 1,400 striking cereal plant workers.

Nebraska Gov. Pete Ricketts sent a letter to the company's CEO this week urging the company to return to the bargaining table with workers at its four plants nationwide, including one in his state. That came just a few days after President Joe Biden criticized Kellogg's for threatening to hire permanent replacements for the workers who have been on strike since Oct. 5.

Ricketts said in his letter that the Battle Creek, Michigan-based company should recognize the contributions its workers have made during the pandemic by continuing to produce its well-known brands of cereal and try to retain them during this period when many companies are struggling to hire enough workers.

"Despite the challenges of the global pandemic, they showed up day after day to do their jobs so that across the country there was food on the shelves," said Ricketts, the Nebraska Republican. "These workers helped Kellogg's increase sales and revenue (and grow net income by over 30%) from 2019 to 2020 - a time when many businesses endured losses due to the financial headwinds of the pandemic."

- Compiled by Dave Flessner