Producer price index (PPI) inflation—the change in input costs to producers—increased substantially during the COVID-19 pandemic, and this increase was heterogeneous across industries. The manufacturing sector was, on average, more severely hit than services. There was also large heterogeneity within the manufacturing sector itself: Coke and petroleum, basic metals, and wood products have seen the highest price increases, whereas computer equipment and other transport equipment experienced the lowest price increases (Figure 1). What factors contributed to the rapid increase in PPI inflation and the large industry ... (full story)