Inflation soars 1.2% as CPI rises

[RightIsWrong]

Originally posted by: Genx87
The economy is growing.
Expect more interest rate hikes.

I'm not saying that you are wrong....but what are you basing this on?

 

[jlmadyson]

Originally posted by: dullard

Originally posted by: dullard

Originally posted by: ntdz
Yes, but energy prices aren't going to continue to rise like they have been, and inflation will be back to the normal 2-3%.

PPI soars again, 0.9%, on energy gains, 3.1%, in Dec. Up 5.4% for the year (23.9% energy rise for the year). Largest calender gain in PPI since 1990.

I'm still waiting, ntdz, for inflation to go back to normal. PPI increases again tops forcasts in Jan. Up 0.3% for Jan, core is up 0.4% in Jan. Overall it is up 5.4% for the last 12 months.

Just another reason for Bernanke and company to continue with fed hikes. I see one or two more as unlikely at this point, although I'm more interested in the CPI due out next week. I'm certain inflation as measured by CPI over the last 12 months will be no where near 5.4%, but more hikes are certainly on there way.

 

[dullard]

Originally posted by: jlmadyson
Just another reason for Bernanke and company to continue with fed hikes. I see one or two more as unlikely at this point, although I'm more interested in the CPI due out next week. I'm certain inflation as measured by CPI over the last 12 months will be no where near 5.4%, but more hikes are certainly on there way.

You are correct, businesses have more costs than just their raw materials. The fact that PPI went up 5.7% over the last 12 months doesn't mean CPI will go up that much. CPI had its local 12-month peak in Sept 2004 of 4.7%. I highly doubt we'd reach that in the next couple months. I'd expect it to stay near 3.4% for Jan. That is just about exactly the historical average for the last century. CPI inflation isn't bad, but it is getting bigger year after year. Hopefully, that increasing trend will stop.

 

[Genx87]

Originally posted by: RightIsWrong

Originally posted by: Genx87
The economy is growing.
Expect more interest rate hikes.

I'm not saying that you are wrong....but what are you basing this on?

This is right from the article

New Federal Reserve Chairman Ben Bernanke testified before congressional committees this week that he's concerned the economy is showing such strong growth that there's a risk of inflation -- which means a need for future hikes in interest rates.



But also with a strong economy you usually see inflation which is what the fed reserve tries to control more than the growth of the economy. I know I know people like conjur have tried to say our economy has sucked for the past 32 months but that is simply false. We have seen a very strong economy the last 32+ months and the fed has been working to head off inflation because of it.

 

[dullard]

Originally posted by: jlmadyson
I'm more interested in the CPI due out next week. I'm certain inflation as measured by CPI over the last 12 months will be no where near 5.4%, but more hikes are certainly on there way.

CPI up 0.7% in January alone. Core CPI up 0.2%. Over the last 12 months, CPI is up 4%.

 

[arsbanned]

Originally posted by: zendari

Originally posted by: Pabster
The blame is to be evenly distributed. No one entity or group is responsible for the current state of affairs (read: extreme dependence on foreign sources of energy). As much as Dave and company would like us to believe it's all the Republicans fault. After all, generations of Democrats have passed through Washington and done absolutely nothing to further the cause.

The fact is that until we start drilling HERE and getting our energy closer to home, building new refineries, we will continue to be slaves to OPEC and the Middle East oil Barons.

Had Clinton pushed ANWR at the beginning of his term we would be seeing cheap oil now.

Yeah, big help that would be. Sustaining our reliance on oil at the expense of destroying a wildlife refuge and having it supply us for a few years is a Republican idea, why would Clinton have done it? If he had, we'd probably be using up the last of it right about now.

 

[dullard]

CPI up 0.1%, core up 0.1%. Year over year, it is up 3.6%. This is a slight improvement from the year over year increase of 4% in January, but it is still higher than the historical average.

Note: comparing inflation to what you used to think of inflation may no longer be valid. The new system allows customers to drop down in quality and still pay the same amount, thus inflation would be 0% for that item. Now that steak eaters can substitute hamburger for steak and claim that the price of meat did not go up. Using the old system (we get the luxury of comparing for the first 6 months of 2006), core and overall inflation were up 0.2% each.

 

[Engineer]

Click me!

WASHINGTON - Inflation at the wholesale level plunged by the largest amount in nearly three years in February as the price of food and energy products including gasoline fell sharply.

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The Labor Department reported that its Producer Price Index, which measures inflation before it reaches the consumer, fell by 1.4 percent last month after having risen by 0.3 percent in January.

The drop in overall prices was much larger than Wall Street had been expecting. However, outside of energy and food, core inflation at the wholesale level rose by 0.3 percent, a bigger increase than the 0.1 percent that analysts were forecasting.

Looks like energy took a plunge in Feb. Core inflation a little high so Feds might still be on the attack. Also, March has been a lion when it comes to gasoline prices (up sharply in the first part of March in most places). Has fallen a little lately, but still higher than when March started.

 

[imported_Tango]

Originally posted by: RightIsWrong
Come guys.....how is this the Dems or Clinton's fault? I know that the argument will be made. Is it because the "Obstruction party" didn't just let the Republicans spend even more than that did? Or is it because Clinton was a bad man?

Of course the Bush administration contradicts themselves again. Saying that they have confidence in the Fed while downplaying the report as anything serious. Meanwhile....the Fed is "seriously worried"

Regardless, the deficit-spending Repubs have put us in a position to rival the Carter years. Good job. Keep up the good work.

Consumer Prices Surge; Retail Sales Rise

By MARTIN CRUTSINGER
AP Economics Writer

WASHINGTON (AP) -- Consumer prices surged in September by the largest amount in more than 25 years as Hurricanes Katrina and Rita sent energy prices soaring at the fastest pace on record.

The Labor Department reported Friday that inflation jumped 1.2 percent last month. It said that 90 percent of that increase came from a record-setting 12 percent surge in energy prices which reflected gasoline prices that briefly topped $3 per gallon last month after widespread shutdowns of refineries and oil and natural gas platforms along the Gulf Coast.

The White House downplayed the report.

"The president has confidence in the Federal Reserve when it comes to monetary policy and their ability to address any inflation concerns," White House spokesman Scott McClellan said.

Meanwhile, the Federal Reserve reported that the devastating hurricanes sent output at the nation's factories, mines and utilities plunging by 1.3 percent in September, the biggest one-month drop in more than 23 years.

The decline in industrial output was led by a 9.1 percent drop in output in the mining sector, a category that includes oil and natural gas. Output at U.S. factories fell by 0.5 percent and utility output was down 0.9 percent.

The Labor Department said that inflation was more moderate outside of energy and food. The so-called core rate of inflation rose by just 0.1 percent, the sixth straight month of benign readings in this area.

However, economists and officials at the Federal Reserve are worried that the energy jolt from the Gulf Coast hurricanes could start causing more widespread inflation problems.

The sharp jump in consumer prices in September helped to push next year's cost of living adjustment for 48 million Social Security recipients to 4.1 percent, the biggest advance since 1991.

In other economic news, the Commerce Department reported that retail sales managed to post a small increase of 0.2 percent in September. However, that tiny gain came after a huge 1.9 percent plunge in retail sales in August.

The concern is that the surge in energy prices will cause consumers to cut back their spending in other areas, a development that would make the economic hit from Katrina and Rita much more severe.

There was disturbing news in that area Friday as a preliminary reading of consumer sentiment from the University of Michigan showed a drop in its index to 75.4 in mid-October, a 13-year low, from 76.9 in September as Americans remained gloomy about high energy prices.

Meanwhile, the Commerce Department reported that businesses built their stockpiles by 0.4 percent in August, reversing a 0.4 percent decline in inventories in July.

Stocks were mixed Friday as the report on weakening consumer confidence offset strong earnings at General Electric Co. and government data indicating that core inflation remains tame.

The retail sales report showed that sales at gas stations were up 4 percent last month. However, much of that increase reflected the surge in pump prices rather than increased volume.

If gasoline sales were excluded, sales at all other retailers actually fell by 0.2 percent in September.

The 1.2 percent rise in consumer prices was far worse than analysts had expected. They had been looking for a gain of around 0.9 percent. However, core inflation was better behaved at 0.1 percent. Analysts had expected a rise of 0.2 percent in this area, which is being closely watched by policy-makers at the Fed for signs that the surge in energy costs is beginning to show up in higher prices in other areas.

The Fed last month boosted a key short-term interest rate for an 11th time and minutes of their discussions at the Sept. 20 meeting showed that Fed officials were clearly worried about what the big jump in energy costs following the Gulf Coast hurricanes would do to overall inflation pressures.

Analysts believe the Fed will keep raising interest rates as a way to fight inflation at their final two meetings of this year, in November and December.

The report on consumer prices showed that energy prices shot up by 12 percent, led by a 17.9 percent surge in gasoline prices. Natural gas prices rose by 12.1 percent rise and home heating oil prices jumped 12.7 percent. The government this week warned homeowners to expect heating bills to soar this winter.

Food costs were up a modest 0.2 percent in September as the cost of beef and dairy products actually declined.

Airline fares, which have been climbing because of higher jet fuel costs, actually dropped by 1.4 percent last month. The price of new cars rose by 0.4 percent but clothing costs dipped by 0.1 percent.

Edit: Title

It's well known that the FED's policy on inflation is targeting a level around and never below 1%.

Inflation is not among the (many) current economic problems of the US.

 

[dmcowen674]

Originally posted by: RightIsWrong
Come guys.....how is this the Dems or Clinton's fault? I know that the argument will be made. Is it because the "Obstruction party" didn't just let the Republicans spend even more than that did? Or is it because Clinton was a bad man?

Of course the Bush administration contradicts themselves again. Saying that they have confidence in the Fed while downplaying the report as anything serious. Meanwhile....the Fed is "seriously worried"

Regardless, the deficit-spending Repubs have put us in a position to rival the Carter years. Good job. Keep up the good work.

I love how even 6 years later the diehard Republicans still continue to blame everything on Clinton.

-----------------------------------------------------------------
A decent thread gets resurected and immediately gets trolled

Mod

 

[conjur]

Originally posted by: Engineer
Click me!

WASHINGTON - Inflation at the wholesale level plunged by the largest amount in nearly three years in February as the price of food and energy products including gasoline fell sharply.

ADVERTISEMENT

The Labor Department reported that its Producer Price Index, which measures inflation before it reaches the consumer, fell by 1.4 percent last month after having risen by 0.3 percent in January.

The drop in overall prices was much larger than Wall Street had been expecting. However, outside of energy and food, core inflation at the wholesale level rose by 0.3 percent, a bigger increase than the 0.1 percent that analysts were forecasting.

Looks like energy took a plunge in Feb. Core inflation a little high so Feds might still be on the attack. Also, March has been a lion when it comes to gasoline prices (up sharply in the first part of March in most places). Has fallen a little lately, but still higher than when March started.

Yeah. Gas skyrocketed to 5-month highs this month.

And these:

US manufacturers growing less optimistic on sector
http://yahoo.reuters.com/news/NewsArtic...16-30-57_N20272441&related=true&rpc=44

 

[ntdz]

Originally posted by: dmcowen674

Originally posted by: RightIsWrong
Come guys.....how is this the Dems or Clinton's fault? I know that the argument will be made. Is it because the "Obstruction party" didn't just let the Republicans spend even more than that did? Or is it because Clinton was a bad man?

Of course the Bush administration contradicts themselves again. Saying that they have confidence in the Fed while downplaying the report as anything serious. Meanwhile....the Fed is "seriously worried"

Regardless, the deficit-spending Repubs have put us in a position to rival the Carter years. Good job. Keep up the good work.

I love how even 6 years later the diehard Republicans still continue to blame everything on Clinton.

-----------------------------------------------------------------
A decent thread gets resurected and immediately gets trolled

Mod

I love how you claim Republicans blame everything on Clinton and provide no proof to back it up. Fact of the matter is that I haven't seen any Republicans in here blame anything happening today on Clinton. Care to prove me wrong, or are you just a hit and run troll?

 

[ntdz]

Originally posted by: conjur

Originally posted by: Engineer
Click me!

WASHINGTON - Inflation at the wholesale level plunged by the largest amount in nearly three years in February as the price of food and energy products including gasoline fell sharply.

ADVERTISEMENT

The Labor Department reported that its Producer Price Index, which measures inflation before it reaches the consumer, fell by 1.4 percent last month after having risen by 0.3 percent in January.

The drop in overall prices was much larger than Wall Street had been expecting. However, outside of energy and food, core inflation at the wholesale level rose by 0.3 percent, a bigger increase than the 0.1 percent that analysts were forecasting.

Looks like energy took a plunge in Feb. Core inflation a little high so Feds might still be on the attack. Also, March has been a lion when it comes to gasoline prices (up sharply in the first part of March in most places). Has fallen a little lately, but still higher than when March started.

Yeah. Gas skyrocketed to 5-month highs this month.

And these:

US manufacturers growing less optimistic on sector
http://yahoo.reuters.com/news/NewsArtic...16-30-57_N20272441&related=true&rpc=44

Didn't post this quote? Why not? Oh wait, because it's positive, so it's bogus.

On the bright side, more than half of the respondents expect to increase capital spending in 2006 and to increase employment, the survey found. Also, about 54 percent of respondents expected their exports to stay the same and 41 percent expected them to increase.

 

[jlmadyson]

Originally posted by: Engineer
Click me!

WASHINGTON - Inflation at the wholesale level plunged by the largest amount in nearly three years in February as the price of food and energy products including gasoline fell sharply.

ADVERTISEMENT

The Labor Department reported that its Producer Price Index, which measures inflation before it reaches the consumer, fell by 1.4 percent last month after having risen by 0.3 percent in January.

The drop in overall prices was much larger than Wall Street had been expecting. However, outside of energy and food, core inflation at the wholesale level rose by 0.3 percent, a bigger increase than the 0.1 percent that analysts were forecasting.

Looks like energy took a plunge in Feb. Core inflation a little high so Feds might still be on the attack. Also, March has been a lion when it comes to gasoline prices (up sharply in the first part of March in most places). Has fallen a little lately, but still higher than when March started.

Not too bad overall coupled with the latest CPI report, we will see where oil is headed in the next few weeks, was down 2-3 dollars in the market yesterday, short term may fall, but as we head toward summer, they will almost certainly head back up.

 

[Engineer]

Originally posted by: jlmadyson

Originally posted by: Engineer
Click me!

WASHINGTON - Inflation at the wholesale level plunged by the largest amount in nearly three years in February as the price of food and energy products including gasoline fell sharply.

ADVERTISEMENT

The Labor Department reported that its Producer Price Index, which measures inflation before it reaches the consumer, fell by 1.4 percent last month after having risen by 0.3 percent in January.

The drop in overall prices was much larger than Wall Street had been expecting. However, outside of energy and food, core inflation at the wholesale level rose by 0.3 percent, a bigger increase than the 0.1 percent that analysts were forecasting.

Looks like energy took a plunge in Feb. Core inflation a little high so Feds might still be on the attack. Also, March has been a lion when it comes to gasoline prices (up sharply in the first part of March in most places). Has fallen a little lately, but still higher than when March started.

Not too bad overall coupled with the latest CPI report, we will see where oil is headed in the next few weeks, was down 2-3 dollars in the market yesterday, short term may fall, but as we head toward summer, they will almost certainly head back up.

Summer driving coupled with an unstable Iran situation could really spur the oil prices higher in the short term.

 

[conjur]

Originally posted by: ntdz

Originally posted by: conjur

Originally posted by: Engineer
Click me!

WASHINGTON - Inflation at the wholesale level plunged by the largest amount in nearly three years in February as the price of food and energy products including gasoline fell sharply.

ADVERTISEMENT

The Labor Department reported that its Producer Price Index, which measures inflation before it reaches the consumer, fell by 1.4 percent last month after having risen by 0.3 percent in January.

The drop in overall prices was much larger than Wall Street had been expecting. However, outside of energy and food, core inflation at the wholesale level rose by 0.3 percent, a bigger increase than the 0.1 percent that analysts were forecasting.

Looks like energy took a plunge in Feb. Core inflation a little high so Feds might still be on the attack. Also, March has been a lion when it comes to gasoline prices (up sharply in the first part of March in most places). Has fallen a little lately, but still higher than when March started.

Yeah. Gas skyrocketed to 5-month highs this month.

And these:

US manufacturers growing less optimistic on sector
http://yahoo.reuters.com/news/NewsArtic...16-30-57_N20272441&related=true&rpc=44

Didn't post this quote? Why not? Oh wait, because it's positive, so it's bogus.

On the bright side, more than half of the respondents expect to increase capital spending in 2006 and to increase employment, the survey found. Also, about 54 percent of respondents expected their exports to stay the same and 41 percent expected them to increase.

Got a problem with the article's headline? Take it up with Reuters.

But, again, expect, plan, etc. You're hanging your hat on hopes.

 

[Engineer]

On energy hikes, CPI inches up .4 % in March (higher than expected). Could keep feds raising rates a tad longer on inflation worries.

 

[conjur]

Core CPI increases at highest rate in a year and the markets react with JOY!


:roll:


The PPT is working overtime.

 

[dullard]

Originally posted by: conjur
Core CPI increases at highest rate in a year and the markets react with JOY!
:roll:

Dow down 0.13%
Nasdaq down 0.16%
S&P down 0.26%.

(Data valid as of the time you posted.)

How is that joy?

 

[conjur]

Dow was over 11,300 after I'd read of the Core CPI news. Looks like it's finally come to its senses.

 

[Engineer]

CPI up .6% in April. Core up .3%. Core rate might push Fed into more rate hikes.

So far this year, consumer prices are rising at an annual rate of 5.1 percent, much faster than the 3.4 percent increase registered for all of 2005. Core prices are advancing at a brisk 3 percent pace, compared with a more moderate 2.2 percent rise for last year.

5.1% is outpacing wages by a long shot. If this keeps going, looks like another year with "REAL" wage declines in the US, well, at least for the middle class folks and possibly poor too.

 

[Cerb]

Originally posted by: Engineer
CPI up .6% in April. Core up .3%. Core rate might push Fed into more rate hikes.

So far this year, consumer prices are rising at an annual rate of 5.1 percent, much faster than the 3.4 percent increase registered for all of 2005. Core prices are advancing at a brisk 3 percent pace, compared with a more moderate 2.2 percent rise for last year.

5.1% is outpacing wages by a long shot. If this keeps going, looks like another year with "REAL" wage declines in the US, well, at least for the middle class folks and possibly poor too.

Even with careful selection of numbers, the real inflation rate will creep in and show up eventually.

 

[Engineer]

Per CNBC, rumor surfaced during last hour of trading of the stock market today that the Fed may be looking at raising possibly 50 basis points (.5%) instead of pausing because of the new inflation data. FWIW.

 

[Saijin]

I'm just curious, is there a way to hedge ourselves against inflation? ie. investments, saving, buying a house possibly?

 

[Engineer]

Originally posted by: Saijin
I'm just curious, is there a way to hedge ourselves against inflation? ie. investments, saving, buying a house possibly?

For savings, you might look at US I-Bonds (inflation based savings bonds). You could also look at TIPS (Treasury Inflation Protected Securities). Both can be found at TreasuryDirect.gov.

As for the others, I'm sure you can find investments that hedge inflation but I'm not on them enough to make that call.