Tuesday, April 15, 2008

What Inflation?

From the BLS:

The Producer Price Index for Finished Goods increased 1.1 percent in March, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This advance followed a 0.3-percent rise in February and a 1.0-percent increase in January. At the earlier stages of processing, prices received by producers of intermediate goods rose 2.3 percent after increasing 0.8 percent a month earlier, and the crude goods index advanced 8.0 percent following a 3.7-percent rise in February.

Among finished goods, the increase in the index for energy goods accelerated to 2.9 percent in March from 0.8 percent in the preceding month. Prices for finished consumer foods turned up 1.2 percent after declining 0.5 percent in February. By contrast, partially offsetting the acceleration in finished goods prices, the rise in the index for finished goods less foods and energy slowed to 0.2 percent from 0.5 percent in February.

For God's sake -- can we please get off the "ex-food and energy" crap? I know of no one -- and I MEAN NO ONE -- who is not effected by food and energy prices. Over the last week we have seen earnings reports cite increasing energy costs as a price reason why profit growth is slowing. And yet the BLS is still trying to tell us that "ex food and energy" prices are decreasing. Please, stop this spin now. I want to get off.

All that being said, notice the increasing rate of prices all through the first paragraph. You can thank rising energy prices for most of it. But regardless of the reason, it looks like we're in for a less than fun ride on the inflation roller coaster.