John Manning
Guest
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 Posted: Tue Aug 19, 2008 10:43 pm Post subject: Wholesale prices: Highest annual rate in 27 years |
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HEY, I KNOW, LET'S GIVE MORE TAX CUTS TO THE CORPORATIONS AND THE RICH!
VOTE FOR MCCAIN FOR MORE OF THIS GREAT ECONOMY!
Wholesale prices: Highest annual rate in 27 years
The Labor Department reports that its Producer Price Index increased by
1.2% in July and by 9.8% in the past year.
By Catherine Clifford
CNN Money, August 19, 2008
http://money.cnn.com/2008/08/19/news/economy/producer_prices/?postversion=2008081911
NEW YORK (CNNMoney.com) -- In another indication of growing inflation,
wholesale prices increased in July to the highest annual rate in 27
years, according to a government report released Tuesday.
The annual Producer Price Index for finished goods rose 9.8% in the 12
months that ended in July.
The jump in wholesale prices is the fastest rate of increase since a
10.4% bump-up in June 1981, according to Joseph Kowal, economist at the
Bureau of Labor Statistics.
The Labor Department also reported that PPI rose 1.2% in July, after
increasing 1.8% in June. Analysts polled by Briefing.com had expected an
increase of only 0.6%.
The surge in producer prices is in large part due to higher energy
prices, said Doug Roberts, chief investment strategist for
ChannelCapitalResearch.com.
Crude oil prices doubled in the 12 months through July, but have since
fallen nearly 24% from their peak hit last month.
The latest PPI report doesn't reflect the recent drop in crude prices,
but Roberts expects future readings to ease.
"The topline is a bit behind the curve - that will fall in the future,"
he said. "Right now, it has not really taken into account the recent
decrease in energy prices."
Core inflation: The so so-called core PPI number, which excludes food
and energy prices, rose by 0.7% - more than the 0.2% increase analysts
had expected.
The core inflation index is "the more long term rate" because it
indicates how much inflation "is seeping into the economy" beyond the
volatile energy prices, said Roberts.
The index for finished goods other than foods and energy has advanced by
3.5% in the past year, according to the report.
Food and energy: The indexes that measure producers' food and energy
prices increased in July, but at a more moderate pace than in the
previous two months.
Energy prices rose by 3.1%, after a 6.0% jump in energy prices in June
and a 4.9% jump in May. In the 12 months through July, prices for
finished energy goods have surged 28%.
Food prices rose by only 0.3% in July, after increasing by 1.5% in June
and 0.8% in May. In a year-over-year comparison, prices for finished
consumer foods have increased by 8.7%, according to the report.
The much more moderate increase in food prices in July compared with
June is the one bright spot in the otherwise glum inflation report,
according to Roberts.
Even though energy prices in July were still on the rise last month, "if
you are seeing the other big component of inflation go down a bit, that
could indicate a positive for the future," he said.
The government reported last week that the the Consumer Price Index
jumped by 0.8% in July, which was twice the increase that economists had
expected. |
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