WASHINGTON, (Reuters) – U.S. producer price rose solidly in October. This was driven by higher gasoline prices and retailing of motor vehicles. It suggests that inflation may persist during tight supply chains due to the pandemic.

Labor Department announced Tuesday that after increasing 0.5% in September’s producer price index, final demand saw a 0.6% increase last month. The PPI grew 8.6% in the twelve months to October after an identical gain in September.

Reuters polled economists to forecast the PPI rising 0.6% monthly and 8.7% annual growth.

Ryan Sweet, a Senior Economist at Moody’s Analytics (NYSE:) in West Chester, Pennsylvania, stated that the U.S.’s inflation acceleration may not slow down as fast as thought. This is especially true for business because of global supply-chain problems.

“Elevated Inflation is putting pressure on Federal Reserve. But they haven’t showed signs of buckle as they will take higher inflation to bring the labor market back into full employment fast.”

Over 60% of the PPI increase last month was caused by a 1.2% price rise for goods. This follows a 1.3% increase in September. The rise in prices of goods was mainly due to a 6.7% increase in gasoline prices. Prices of petrol, jet fuel and diesel rose as well.

As beef and veal prices fell 10.3%, wholesale food prices declined 0.1%. The government brought new model-year passenger cars to the PPI and reduced the prices of light motor trucks.

After a September increase of 0.2%, services saw a 0.2% rise last month. The 8.9% rise in margins at automobile and parts retailing was responsible for over 80% growth in services. Transport and warehouse services both rose 1.7%.

Also, there were increases in wholesale prices for apparel, footwear and truck transport of freight. But portfolio management fees fell.

Producer prices increased 0.4% excluding volatile components such as energy, food and trade services. In September, the core PPI rose 0.1%. Core PPI increased 6.2% over the 12-month period ending October. This follows a September increase of 5.9%.