Skip to comments.Gasoline pushes up US consumer prices in February
Posted on 03/16/2012 8:57:33 AM PDT by tobyhill
U.S. consumer prices rose by the most in 10 months in February as the cost of gasoline spiked, a government report showed on Friday, but there was little sign that underlying inflation pressures were building up.
The Labor Department said its Consumer Price Index increased 0.4 percent after advancing 0.2 percent in January. That was in line with economists' expectations. Gasoline accounted for more than 80 percent of the rise in consumer prices last month, the department said.
(Excerpt) Read more at chicagotribune.com ...
0.2% + 0.4% x 11 = 4.6%, round to 5%
How do you get to 6%? Or are you expecting prices to climb even faster?
Clearly they need to remove food and gas from the calculation, like they did the price of homes in the early part of the century. :-)
Major newspapers are running the ‘high price of gasoline’ story - they don’t run stories that hurt Obama. I’m betting a few months before the election, the price is down - Credit given to Obama.
Don’t ignore the industrial production report. Obama is the first President since Carter not to reach 80% capacity utilization. From Zero Hedge:
They can “remove” those from their calculation,
but they can’t remove increased prices at the store shelves.
I thought food and fuels were left out of the CPI, or are they trying to blame other inflation on the oil companies again? (Oil companies have to pay those inflated prices, too.)
There’s very little we buy in this country that didn’t arrive by truck (diesel),
and those prices are going to be up.
Exactly. People see the prices and even despite the Government claims, we know it’s well over 10% higher for gas and food just this last month.
Everything is going so well.
“...but they cant remove increased prices at the store shelves.”
Actually, they can and they do. The name for it escapes me, but the methodology goes as follows: if the price of (ex) beef goes up 1%, it’s assumed the consumer put the beef back and purchased the chicken, which rose 0.25%.
Voila! Inflation under control.
This is an undercover tape - one of the men you’ll hear is connected to the New York Times...
After watching 30 seconds you’ll know they would never run anything that would hurt Obama...
The happy news here is that the costs of food and fuel are not counted when the rate of inflation is calculated by the federal government. Therefore the increase in the price of gasoline is not causing the rate of inflation to increase.
Aren’t you glad of knowing that?
How can this be? I thought the government doesn’t count food and energy?
But then the stores would have to lower the price of the beef to move it before it spoils and just to try and recoup some of their expenses.
Some of the cost increase is supply and demand but a majority of all increases is transportation cost.
The only way the inflation rate is this low is if buggy whips, chicken lips, dromedary nose rings, and New Coke are the majority of products monitored.
As our government refuses to give us REAL numbers so they can play their games with COLA increases, we need a source of a real everyday/month/year shopping basket.
Any suggestions as to where/how that data could be obtained and force fed to the Cosmetically Enhanced Readers on the nightly news?
How often do you buy a home, and even if you buy one a day, why should I care? (With regard to inflation).
Can’t eat a washer and dryer.
Uh, no . . . that’s not how it works. Unless all you read are blogs that try to sell you gold.
I’m just making fun of some of our local econ “experts.”
—How often do you buy a home, and even if you buy one a day, why should I care? —
I think that’s the argument and why they use the rent equivalent. Meanwhile, I rented from 1998 through 2007, the time of the entire runup, yet my rent wend DOWN. That was not really reflective of the housing market.
The CPI should reflect, for any given day, what it would cost to put a roof over your head that day, buy a meal that day, a car, clothing, the basics. That day.
I know. I have never understood why the Government thinks food and gas doesn’t belong in the inflationary index?
I ran to thee store the other day to get some sugar for my ice tea and I couldn’t believe how much even the store brand increased.
They will not just have to rise more, they will have to rise faster to get near 6%.
Not that NObama isn’t capable of it...
Some people think otherwise.
LIES FROM DAMNED LIARS!
Not sure what you’re referring to. My point was to illustrate (at least one way) how the CPI numbers are calculated to hide the true rate of inflation.
Don’t know what ‘gold blogs’ are. Does that impact how the BLS figures inflation?
And you did, incorrectly . . . and most of the folks who make that error usually are trying to sell me gold.
Nope, not a gold blogger.
So the BLS is on the level with how they calculate inflation?
Nobody is talking about how the weaker dollar, fueled by the government spending and borrowing binge, is causing our country to pay more for gas. We have to bid higher in the world market when our dollar is toothless, even for oil produced in our own country. That is why we are exporting more oil. Higher oil prices are being caused by more than just uncertainty over Iran, government restricted domestic production and speculator activity.
Obama and the Democrat gang of thieves need to have their “sign of blame” hung around their necks for this problem so everybody understands.
5%, ha ha.
I feel (in the wallet) that inflation is really 7-9%.
Huh? I'm not sure how you made that jump. I merely pointed out that you are mistaken.
“we know its well over 10% higher for gas and food just this last month.”
Your eyes are lying to you. Don’t you understand that Apple, Inc. is over $600?? You can eat an iPad, right?
DO YOU NOT BELIEVE IN THE GLORY OF OBAMA, HERETIC?
“Huh? I’m not sure how you made that jump. I merely pointed out that you are mistaken.”
Normally when someone says another is incorrect, it implies that person knows, or may know, what is correct; that is how I made that ‘jump’.
My lunchtime is about over so I was just wondering if you have knowledge of how the BLS actually calculates inflation and if it’s done in a way that reflects the true measure of rising/falling prices. Thanks.
I saw a news report the other day that most staples at the grocery store are up roughly 9% THIS YEAR!
Of course, food and energy prices are not factored into the government inflation computations. What is holding those numbers down (and I’ve actually heard a government shill on Fox News claim this is a good thing) is that housing prices are way down, as are consumer electronic prices. I found myself shouting at the TV, “HOW MANY HOUSES OR BIG SCREEN TVS DO YOU BUY EVERY WEEK?!?!?!?!?!?!”
The “stimulus” and continual “monetary easing” are doing nothing but destroying the value of our money and keeping stock prices artificially high... I’m afraid we’re in for another “stock bubble,” even worse than what we saw in 2008, and I’ve just barely recovered my losses from that...
Anybody else notice that when you lose 50% of your investments, they need to increase in value by 100% just to get you back to “even?”
...gas prices didn't SPIKE until the last week in February. A gas price spike wouldn't have had time to effect all of February. The chart shows a rise over all of 2012, just to look at a time frame, so if gas prices are now being deemed to be the cause of a monthly Consumer Price Index, it should have had the exact same effect in the previous month.
The biggest change regarding global oil supply and demand issues in recent months and days is (a) hightened security questions vis-vis-Iran regarding the Persion Gulf, (b) decreased global market availability of Iranian refined oil products, and (c)lack of any major new boost to global oil production or refined output - in a market with a mere 2.5million barrels between global supply and demand.
Though global demand is temporarily stable, with Europe still in recession and China reigning in its growth, so is supply currently and the security issues are stressing against the small cushion between supply and demand.
As long as the Iranian security issues continue, so will security demands on oil prices, unless the Saudis decide to, or a collection of interests find a way to, generously boost supplies.
Obama and Cameron are discussing coordinated releases of I.S. and U.K. oil reserves now, in light of current prices. It’s the wrong reason - prices, and the wrong time. But, the time for that UK./U.S. joint action may come if Israel decides to take-out Iran’s nuclear facilities. Then, the purpose of the reserves - “crisis disruption of oil supplies”, would be served.
Meanwhile, if you and your neighbors want your regions gas prices to go down, drive less. Supply and demand works.
Can you imagine some of these people 12 dollars an hour or making 22k or so a year?
They are all but dead.
The BLS calculates inflation based on a basket of goods. However beef is beef and chicken is chicken. The substitution effect, to which you refer, doesn’t come into play.
Do you understand that you are posting on a thread where the government computed energy prices into inflation?
Iran is going to take over the world.
The refineries need maintenance
The speculators are doing it
We're running out of oil
We have plenty
Americans are driving less, so we need to raise prices
The Chinese have millions of mopeds to fuel
There is a leak in a pipe in Moose Jaw Alaska
A rodent chewed through a line at the main pump station in Texas.
Demand is down but we are producing more however, our refineries have been and are being shut down
Prices will go to 6.75, but 3 days before the election, Obama will lower prices to 1.40 to ensure reelection
A school of endangered blowfish have been sucked into a pipe, and it takes time to get them out.
Iran has nukes
Unstable markets worldwide.
A big refinery fire
A small refinery fire
A refinery fire could possibly happen
New gas additives are being developed to make Americans even more stupid
They forgot to build a pipe
They dont like pipes
Rich liberals want the price even higher.
Obama hates the oil industry
The oil industry hates Obama and are hoping this kills his reelection
Liberals want everyone ridding donkeys and bicycles to work as a sacrifice for the planet
We moved more armaments to the gulf because Iran is taking over the world
Wild money printing and massive deficits
Americans love high gas prices
Refinery margins are tight They hardly make any money at all.
The masses have no idea how free market works.
It is being exported because we are making more than we use.
Demand has fallen
We need refinery upgrades and expansion
We are making more than we use so we have to sell it to the Chinese, (They have 1 billion mopeds to fuel , and need to go to work so they can send us more Communist products .
We have plenty of oil, so much so, we need to sell it abroad to keep prices low.
We have plenty of oil, so much so, we need to sell it abroad to keep prices high.
Barry intentionally pissed off the oil companies and seriously limited their profit
The population has increased
The less people drive the higher the price, so you need to drive more.
This is caused by warm weather.
Its caused by cold weather.
We are importing less crude oil and even become an exporter of refined products.
High gas prices have creates jobs and wealth in the US, so we need to export more oil.
High gas prices are good for the economy. When it reaches $6 per gallon, America will be back on track.
It's already happening from time to time.
Saw a bin full of 5 pound rolls of 73/27% hamburger at Kroger's reduced from $11.25 to $5.95 twice in the last month.
It had an expiration date on it of two days away.
I think it’s something like 25% of household income goes to food and gas so if an item cost $3 a year ago but now cost $4 that is a 25% increase which relates to over a 6% inflationary rate based on income. I don’t know of any item at the grocery store that has actually decreased in price.
That’s a case where inflation is there but you don’t see it because it’s being absorbed by the store and they figure they’ll throw in the cheap meat at a cheap price to you for a loss to them just to get you in the store.
And this is also how the ministry of propaganda are trumpeting Obama's lie (technically true) that under his rule, domestic production of oil is the highest it's been in 8 years. What he's conveniently leaving out of the discussion is that production on government licensed land and off-shore is down by about 24%, which along with the worthless dollar, is driving up the cost. So it's becoming MORE profitable for drilling on private land, and it's been expanding by more than 25%.
Imagine what would happen to oil prices had the US government allowed increased production on licensed land, or even allowing the licenses. We'd have plenty of oil, and prices would plummet, which is something that Obama and his minions DO NOT WANT.
Is it just me, or does it seem that the board at AAPL is keeping the price of their stock artificially high?
Think about it. This is a company FLUSH with cash. And stock prices are astronomical. In the last 5 years of so it's gone from less than $100 to nearly $600. But the last stock split from AAPL was in 2005, and they haven't issued a dividend since 1995. It seems that they're trying to keep their stock prices artificially high, but maybe that's just me.
From CPI FAQs
What goods and services does the CPI cover?
The CPI represents all goods and services purchased for consumption by the reference population (U or W) BLS has classified all expenditure items into more than 200 categories, arranged into eight major groups. Major groups and examples of categories in each are as follows:
FOOD AND BEVERAGES (breakfast cereal, milk, coffee, chicken, wine, full service meals, snacks)
HOUSING (rent of primary residence, owners’ equivalent rent, fuel oil, bedroom furniture)
APPAREL (men’s shirts and sweaters, women’s dresses, jewelry)
TRANSPORTATION (new vehicles, airline fares, gasoline, motor vehicle insurance)
MEDICAL CARE (prescription drugs and medical supplies, physicians’ services, eyeglasses and eye care, hospital services)
RECREATION (televisions, toys, pets and pet products, sports equipment, admissions);
EDUCATION AND COMMUNICATION (college tuition, postage, telephone services, computer software and accessories);
OTHER GOODS AND SERVICES (tobacco and smoking products, haircuts and other personal services, funeral expenses).
Also included within these major groups are various government-charged user fees, such as water and sewerage charges, auto registration fees, and vehicle tolls. In addition, the CPI includes taxes (such as sales and excise taxes) that are directly associated with the prices of specific goods and services. However, the CPI excludes taxes (such as income and Social Security taxes) not directly associated with the purchase of consumer goods and services.
The CPI does not include investment items, such as stocks, bonds, real estate, and life insurance. (These items relate to savings and not to day-to-day consumption expenses.)
For each of the more than 200 item categories, using scientific statistical procedures, the Bureau has chosen samples of several hundred specific items within selected business establishments frequented by consumers to represent the thousands of varieties available in the marketplace. For example, in a given supermarket, the Bureau may choose a plastic bag of golden delicious apples, U.S. extra fancy grade, weighing 4.4 pounds to represent the Apples category.
- - - - - -
Which index is the “Official CPI” reported in the media?
Our broadest and most comprehensive CPI is called the All Items Consumer Price Index for All Urban Consumers (CPI-U) for the U.S. City Average, 1982-84 = 100.
In addition to the All Items CPI, BLS publishes thousands of other consumer price indexes. One such index is called “All items less food and energy”. Some users of CPI data use this index because food and energy prices are relatively volatile, and these users want to focus on what they perceive to be the “core” or “underlying” rate of inflation.
Thanks for clarifying that, thackney. Interesting that the clarification raises the question of how easily the administration can game the index numbers by switching indexes. I didn’t realize there were many different ones, but had commonly heard the phrase “excluding the volatile food and fuel sectors” when the CPI was discussed.
Any time a single CPI is announced from BLS, it is inclusive of all. All the others have stated exclusions or added descriptions.
On blogs and other tinfoil hat sites, you can find them referencing the core as the main.