Just kidding.
Posted on 05/14/2008 6:43:29 AM PDT by AndyJackson
Inflation pressures ease in April despite biggest jump in food prices in 18 years
WASHINGTON (AP) -- Inflation pressures eased a bit in April despite the biggest jump in food prices in 18 years.
The Labor Department reported Wednesday that consumer prices edged up 0.2 percent last month, compared to a 0.3 percent rise in March.
The lower inflation reflected a flat reading for energy, which helped offset a 0.9 percent jump in food costs as prices climbed for many basic items, from bread and milk to coffee and fresh fruits.
The unchanged reading for energy reflected a big 4.8 percent jump in natural gas prices, offset by a 2 percent decline in gasoline costs.
The reported drop in gasoline prices reflected the government's accounting process, which discounts expected seasonal price changes.
Since gasoline prices normally rise significantly in April, the 5.6 percent rise in prices for the month turned into a 2 percent drop after the government adjusted for normal seasonal changes. That was little comfort for motorists now paying record prices at the pump, which are nearing $4 per gallon.
Core inflation, which excludes food and energy, showed prices well behaved in April, rising by just 0.1 percent, compared to a 0.2 percent gain in March.
That reading should ease concerns at the Federal Reserve that the sharp increase in food and energy prices this year would lead to broader inflation problems.
The Fed, fighting against a severe credit crunch and spreading economic weakness, has cut interest rates seven times since last September in an effort to keep the country from toppling into a recession.
However, last month it signaled that it might take a pause in the rate cuts, with some Fed officials expressing worries that further reductions in interest rates could trigger unwanted inflation. The central bank is expected to keep rates unchanged when officials next meet June 24-26.
So far this year, overall inflation is rising at an annual rate of 3 percent, down from a 4.1 percent increase for all of 2007. Core inflation, excluding energy and food, is up at an annual rate of 1.8 percent in the first four months of this year, compared with a 2.4 percent increase for all of 2007.
Even with the slowdown in price increases so far this year, workers' wages are not keeping up. A separate Labor Department report showed that average weekly earnings for nonsupervisory workers dropped by 1 percent in April compared with a year ago, after adjusting for inflation. It was the seventh straight month that inflation-adjusted wages were down compared to a year ago.
The combination of rising food and energy costs, weak wage gains and falling home prices have left households feeling squeezed, with consumer confidence readings plunging to recessionary levels.
While many economists believe the country is in a recession, other analysts contend that the country may be able to avoid a full-blown downturn, especially if consumers spend a sizable portion of the 130 million economic stimulus payments that the government is now sending out.
The rise in food costs was led by a 3.2 percent jump in fresh fruit prices. The cost of bread was up 1.5 percent, 14.1 percent higher than a year ago, while milk prices rose by 0.9 percent, up 13.5 percent from a year ago.
Gasoline prices, even with the decline in April, were 20.9 percent higher than a year ago.
Clothing prices rose by 0.5 percent in April, even though discount stores reportedly engaged in heavy discounting in an effort to spur lagging sales.
New car prices fell by 0.2 percent last month, reflecting the trouble automakers are having with sagging demand in the face of a weak economy and soaring gasoline costs. Airline ticket prices, which had been surging because of more expensive jet fuel, fell by 0.5 percent last month but are still up significantly from a year ago.
The cost of bread was up 4.1 percent higher than a year ago, milk prices up 13.5 percent from a year ago. Gasoline prices, even with the decline in April [the 5.6 percent rise in prices for the month turned into a 2 percent drop after the government adjusted for normal seasonal changes], were 20.9 percent higher than a year ago....Clothing prices rose by 0.5 percent in April, even though discount stores reportedly engaged in heavy discounting in an effort to spur lagging sales.
The only thing that makes sense is the average trend in price levels plotted back many years. Month to month variations are noise, and month to month variations with government adjustments are comlete and utter nonsense.
ping
I just don’t get it. Despite the fact that the government does not keep track of food and energy price inflation, it keeps on collecting the data and distributing it.
Bwahahahahahahahahahahahahahahahahaha.....
Who hired the subprime mortgage people to calculate the numbers at BLS?
Bwahahahahahahahahahahahahahahahahaha.....
Life is great unless you have to drive, buy things that have to be trasnported or eat...
Interest rates MUST come up. Will probably happen winter of 2008.
“The lower inflation reflected a flat reading for energy, which helped offset a 0.9 percent jump in food costs as prices climbed for many basic items, from bread and milk to coffee and fresh fruits.”
Hope everyone’s enjoying burning our food for fuel.
“The reported drop in gasoline prices reflected the government’s accounting process, which discounts expected seasonal price changes.”
So the increase we are seeing now is not only seasonal, but is in fact lower than we normally expect this time of year.
It’s secord oreder differential equation, x’ and x”.
Yes, it is AND the cost of food and utilities are not factored into the inflation schedule... even with dairy products being federally controlled - I wonder if the cow cares..............someone is getting hurt here……
Now let's say material cost for the plastic (oil), chips (silicon) and wires (copper) increase due to the fact commodity prices increase. In order to maintain a profit, I have to increase the cost $100. Is this inflation- absolutely.
As a closing note a common misperception is that increasing wages is inflationary... WRONG. If I can increase productivity at a higher rate than wages increase I can keep prices down and reward the workers!
The numbers coming out of the federal government for inflation are complete and utter nonsense.
Gasoline in Lansing, MI on Sunday was $3.769 today is is $3.999
Eggs last year about $1.00/doz, today, $1.80. Milk last year about $2.25, this year $3.50
Since gasoline prices normally rise significantly in April, the 5.6 percent rise in prices for the month turned into a 2 percent drop after the government adjusted for normal seasonal changes. That was little comfort for motorists now paying record prices at the pump, which are nearing $4 per gallon.
I am making TONS of money just filling up my gas tank!! The way I figure it, CDs are paying in the 4% range, using the above spread, I am making 7.6% just filling up my gas tank, LMAO, and since it’s non-taxable (not income) my effective yield on filling up my tank is probably a touch over 10%.
ROTFLMAO!
All that is on my Credit Cards Statement (which I pay off every month) from last month is GAS, FOOD, PRESCIPTIONS and CELL SERVICE. All up!
Neat thing is I can compare by code what I spent years past on the same items.
Are you sitting down? Per unit, my costs are up over 28% from 06.
Energy, health-care and food are the major culprits.
We dropped the little fun things from our monthly budget to cover the increases and bring us back into the black.
“Prices actually rose from $3.09 to $3.39.”
In Ohio, saw $3.90 this morning!
“Only” $3.39? Dang... ours went from $3.15 to $3.60.
Yesterday alone they went from $3.71-3.75 to $3.95-$3.99.
I’ll be interested to see if they continue to cook the books on gasoline when it fails to drop as it “seasonally” does here soon...
Martin Crutsinger, your are full of gobbledygook twaddle.
Have you been in a college macro-economics class lately? Most professors and textbooks treat Keynes as the only one who matters. If there’s a problem in the market, the government needs to do something. Every change in prices is called “inflation” or “deflation,” regardless of its cause or consequence. I sat through four classes of this noise knowing it was a liberal fairy-tale before I finally had one professor who actually explained the consequences of the nonsense we were being taught in the other courses.
Jeesh I wish I was paying 3.39. Gas prices in my area just went to $4.05 for regular. Diesal is $4.65
I was buying ice cream the other day. Half the containers were 1.75 quarts, the other half had switched to 1.5 quart containers. A couple years ago ice cream came in 1/2 gallons. I’m sick and tired of food companies aiding government obfuscation of inflation by insulting my intelligence with the assumption that I, as a consumer, will not notice a 15% decrease in quantity with no decrease in price.
The last time I was in a econ class was in the 80's when Reagan was in the process of fully discrediting Keynes! You would have thought Keynes would be somewhere on the the shelve with geocentricism by now!
Just kidding.
Not all of it. Don't forget that the part about "a severe credit crunch and spreading economic weakness" fit right into the doom'n'gloom template.
We can say that overall price stability is bad because it means some prices are higher while some are lower, and this is always bad. High prices for food and oil is bad because consumers are hit hard and foreigners are getting rich; and prices for homes and clothing going down is bad because home owners are hit hard and foreigners are dumping at a loss.
/sarc
Hey my good friend. I’ll answer you in a couple of hours. I can’t reply right now.
Much love and respect to you and your family.
When you drop some things from your budget and substitute other things, that is called a horizontal substitution. If one year ago you paid $4.49 / lb for sirloin steak, and now today pay $3.49 for 80% hamburger not only is there is NO INFLATION, but there is actually a drop in price. Your cost for meat went down.
It is simple. With full expenditure of a constant income, your cost of living cannot increase and THERE IS NO INFLATION. See what a bit of statistical juggery can do for you. In fact, since the bar codes are read by a computer using an Itanium as opposed to Pentium chip, your quality of life IMPROVED and with a hedonic correction, there has actually been deflation.
I kid you not! This is what BLS does to generate inflation statitistics, and then Bush and the Pubbies who are blamed for running the whole place cannot understand why they are hated. [Democrats do it to, but Bush did nothing in 6 years of power to fix government lying through statistics.]
My guess is that profs nowadays don't even come close.
I just wrote you long theses, but I scratched it. I realized it was too personal.
The Republican party is dead. It is now part of the Democratic party.
We are in big trouble.
I am glad you and your family are living in Panama.
On these threads personal stuff has to go on a private post; there's just too many of the "I know where you live" types hanging around so we've got to play it safe.
Just the same, you can't let them get you down. Here in paradise where we are, "big trouble" means a military coup, cholera epidemic, theft of half the gdp, or all three. The fact that none of the three viable candidates are even in that kind of ball park gives me no end of relief. Still, there are differences, and comparing dem spending to rep tax/spending (McWarmer's carbon caps to Obama's $200 billion in tax hikes) is comparing apples to hand grenades.
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