THE STATISTICS known as the Producer Price Index lurched upward from July to August. It was the longest lurch since the one in January that Alfred Kahn, the president's adviser on inflation, termed "catastrophic." The Producer Price Index is the same indicator that used to be called the Wholesale Price Index until the wholesalers' trade associations began complaining that it was bringing their respectable businesses into general hatred and contempt. The public didn't understand, the wholesalers argued, that they weren't entirely responsible for the behavior of the index. The federal statisticians have adopted what they hope will be a less accusatory term -- since, after all, producers are everyone in general and nobody in particular. But the message in the numbers has not been improved.
The Producer (nee Wholesale) Index tends to be excitable and to overstate the situation a bit. But it gives consumers early warning of what's coming toward them, down the great chain of processing systems. In August the index for finished goods rose 1.2 percent, with much blame attached to food prices. The previous month it had been 1.1 percent, attributed largely to fuel prices. Before that, the increases had resided in various industrial commodities, and before that it had been food again. These monthly signals, taken separately, don't give you much sense of what's going on.
Inflation reached its lowest point of recent years in 1976. That decline was the effect of the previous year's recession, and it seemed for a time that inflation was coming under control. But the pattern reversed around the end of 1977, and the present surge began. It has continued unremittingly, and the inflation rate is now approaching the very high level that it last touched in 1974.
The central causes do not lie in the commodity markets and OPEC, but in public attitudes and political practices. There are two American habits of mind, shared not only by the Carter administration but by most of its constituents as well, that have contributed heavily to it.
One is the inability of this society to decide how to absorb real losses of wealth like the higher costs of foreign oil -- or who is to absorb them. The answer, so far, is nobody -- and the process of passing them around and around through the economy constitutes much of the present inflation.
Much more of it is generated by sustained efforts to make the national economy perform better than, apparently, it is currently capable of doing. Forced too hard, it overheats. The present administration, like its three immediate predecessors and most of Congress, has kept stimulating and overstimulating the economy to try to get the unemployment rate lower. Instead, in August, unemployment rose to 6 percent. In traditional terms, that's intolerably high. But in current conditions, it may represent little more than the lowest rate consistent with economic stability. It may be only a hairsbreadth above the actual full-employment rate -- below which labor markets become overstrained and generate wage inflation. Those are the melancholy warnings in the latest price indicators -- as well as in all the others of the past year.