Inflation In Sept. Highest Since '80 (Washington Post)

[Up2Late]

(Finally, an article that doesn't start with, "...but when you take out Energy Costs...," I hate that!)

Inflation In Sept. Highest Since '80

Federal Benefits Set to Rise 3 to 4 Percent

By Nell Henderson
Washington Post Staff Writer
Saturday, October 15, 2005; Page A01

Hurricanes Katrina and Rita helped make energy prices soar in September at the fastest rate on record, contributing to the highest monthly consumer price inflation in 25 years, the government reported yesterday.

The inflation spike means payments to millions of Americans receiving Social Security and other federal benefits will rise next year by the largest amount since 1991, because of automatic cost-of-living adjustments.

However, average wages for most workers have risen more slowly than prices over the past 12 months, leaving workers with less spending power than a year earlier.

Energy prices have eased a bit this month and other prices show no sign of breaking out of control, analysts said. The worst monthly inflation increase in a generation does not signal a return to the economic turbulence of the 1970s and early '80s, with double-digit inflation and interest rates. Global competition and a vigilant Federal Reserve should prevent that, they said.

<http://www.washingtonpost.com/wp-dyn/content/article/2005/10/14/AR2005101400510.html?nav=rss_nation>
(more at link above)

[applegrove]

1. Why they so desperately use Katrina to lower wages of workers there.

So the rich will not have to partake in fighting inflation. So the fight against oil inflation will remain on the backs of the poor & middle class.

[neverforget]

2. I love it when they say this about inflation:

"The so-called core CPI, which excludes food and energy rose just 0.1 percent for the month and 2 percent over the past year." Well thank GOD! Because if could just quit eating, driving and heating my house, I would be okay! :sarcasm:

[Up2Late]

3. Exactly!

That's exactly what pisses me off too. I guess they are saying that for those Super Rich who never consider those things in their monthly spending. (notice, I didn't say BUDGET, that's a foreign word to those people).

[neverforget]

9. For the rich, everything is great. They pay way less in taxes and

they are getting richer while the middle class and poor's wages can't keep up wih inflation. Price increases for the rich are easy to handle or do they even notice?

[CountAllVotes]

17. couple of links re: Consumer Price Index

Rather cumbersome admittedly but they do outline what is and is not added into the CPI:

http://www.bls.gov/cpi/#data

here is one on the historical CPI data:

http://inflationdata.com/inflation/Consumer_Price_Index/HistoricalCPI.aspx

[1932]

10. Another implication: enegy companies do great while small business person

has to get in line behind them if they want to sell something to you so they can live (or behind your creditors, if wages continue to fail to keep pace with inflating prices).

[Art_from_Ark]

12. Just what ARE they counting in the core CPI?

No food, no energy, and more than likely no property taxes, no local taxes, no insurance, no health care, no housing, no tuition...

[Mark E. Smith]

4. Double Whammy: Prices Up, Wages Lagging

It was the year John Lennon was murdered, Mount St. Helens erupted and the U.S. Olympic hockey team pulled off the Miracle on Ice by beating the Soviet Union and going on to win the gold. Not since 1980 has inflation risen so quickly in one month.

The numbers mean payments to millions of Americans receiving Social Security and other federal benefits will increase next year by the largest amount in 15 years, because of automatic cost-of-living adjustments based on the CPI, a measure of the average change over time in prices paid by urban consumers for a market basket of good and services. But most workers are losing ground, leaving them with less spending power.

The U.S. median income has fallen for five consecutive years, according to the Census Bureau. That's the longest such decline since officials started tracking those numbers in the 1960s.

"It's unprecedented," said Jared Bernstein, senior economist at the liberal-leaning Economic Policy Institute. "There is a large and growing gap between how the economy is performing and the living standards of the people stoking the engine."

http://seattletimes.nwsource.com/html/nationworld/2002562268_econ15.html

The Hero of New Orleans continues to march this country towards the third world economy his patrons require to maximize their economic potential.

[Fabio]

5. Its Called Stagflation

And the fed is very worried about it.

Stagnant Economy and Inflation (usually a feature of an overheated economy). Presto!

[InkAddict]

8. That's easy to fix

Just kill off more high-paying jobs. The churn to eliminate modest assests (smaller house or low-rent apartments, energy saving devices that knock off a few bucks from the bill, rotting teeth that can kill, pressure to live a life of crime) will put more $$ into the pockets of the rich and kick a few rungs off the ladder in both directions. Middlers will have nothing to reach for and those lower perhaps will die off or enter the lucrative penal system where those at the top are farming out the low-wage jobs under the guise of rehabilitation of chronic offenders. DUH, WHAT'S WRONG WITH THIS PICTURE!

Did anyone happen to see that Billy Gates was touting computer careers at universities across the nation--shouldn't he have held a foreign-based seminar instead - hypocrisy! If those that already graduated can't compute, read x-rays, provide adequate customer service to their American family and friends, what makes him think our universities will rise to the occasion and teach Americans better, newer skills to meet his demands for "trained" workers. And just why would one want to spend a lifetime job jumping from corp. to corp. as new projects come, go, or fail to materialize as planned by the better paid bean-counters and execs with fantasy island parachutes and wild imaginations! I recently noted that even Northrup was laying off 400 in MD though 1000 may be eligible for severance packages? What kind of blackmail is that?

And just who will "they" blame when there are no planes to take them off to Paradise Island, or hand-pick those raspberries for their torts ala mode!

[Up2Late]

13. I've got an easier fix, Impeach Bush, Frist, and Delay,and Cheney.

O.K., Maybe it wouldn't be easy, but it would work.

Plus, What Bill Gates is doing is a step in the right direction, but he's not backing it up with much money.

His Idea, which I thought of too 10 years ago, is to start to pay for American Students to go to Collage, but, like I said, he's not backing up his Idea with the amount of Money it would take to do that.

[Barkley]

14. We won't have 1970s stagflation this time

Because Fed leadership will not abet the inflation.

The 1970s inflation was cost-push inflation lead by higher energy prices that arose from limited supply. Higher fuel prices encouraged firms to reduce output and jobs

The Fed then had the goal of maintaining growth and jobs, so they increased the money supply. Which ultimately fed into the inflation spiral.

Today's inflation is demand-pull inflation oriented; meaning the supplies are there but the demand for oil is increasing.

Firms are not reacting to higher prices by cutting back: China is growing 9%. US firms are expanding as well.

Under this scenario, prices will rise however, this Fed will raise interest rates in order to achieve price stability even it means triggering a recession.

[RUMMYisFROSTED]

6. "The U.S. median income has fallen for five consecutive years.."

Five years. Hmm, five years. I wonder what's been going on for five years. Hmmm. :freak:

I'm looking for answers people!

[Jackpine Radical]

11. I'm working on that question. Lessee now....

Must be the delayed effects of the maladministration of the Clenis.

[RUMMYisFROSTED]

26. My dad still blames Carter.

:eyes:

[nolabels]

27. Sounds typical of most brain washed pugs

They would still believe it's the liberal democrats fault when the some Con steals his last piece of bread from his dying hand

I might see a pug or two in hell, but at least I will know how I got there :toast:

[Zynx]

7. Typically in periods of price inflation, wages lag behind prices.

The 1970s were full of examples of this happening where double digit inflation was accompanied by only high single digit wage growth.

[lovuian]

15. They have suppressed the workers income and now

Reality has hit!!!

[CountAllVotes]

16. yes, an economy going nowhere but down

with rampant inflation that seems endless and unstoppable.

Great crap economy alright!

Thanks again *. :grr:

[Up2Late]

18. I have another 2005 "Inflation Secret" that most don't know...

...I've noticed that my Grocery bill has been going up over the last few years, even though they never report any inflation at the Grocery store, but here's why: If they introduce a "New and Improved" or just a different size, weight or quantity of, let's say, Toilet Paper, they can raise the price with out having it count toward inflation.

Some here are probably going to say Duh! but a lot of people don't know that as long as the make the quantity or weight different, it's counted as a different product, so it doesn't count as a price rise.

[truthisfreedom]

19. ahh, it gets a new UPC !

that's how they doctor inflation numbers. interesting.

[halsaxby]

24. LOL..I've also noticed....

that item volumes are getting smaller while the price remains constant. I'll bet that doesn't get counted either.

[proud patriot]

20. Buckle Your Seatbelts folks the ride will get a little bumpy

:-(

[cloudythescribbler]

21. Energy prices clearly driving this inflation ...

indeed, skyrocketing energy prices were the ONLY one above the annual CPI increase of 4.7%, registering a whopping increase of over ONE THIRD.

BUT ENERGY PRICES ARE SLATED TO RISE EVEN HIGHER THIS WINTER, MEANING MORE INFLATION. On the other hand, energy prices might level off (at a very high level), and then the increased energy costs will ripple through the economy with a secondary level of inflation.

All this points to: High commodity prices for oil & gas, and with the bursting real estate bubble before/after/during this, another economic downturn within the next year or so.

[halsaxby]

23. The energy companies are getting....

a green light from BushCo to fix prices and gouge. They are stealing a page from Enron's book, by creating "shortages" to justify the gouging. We are already hearing about the coming natural gas "shortage," after seeing prices double from last year to this year. We are continually reminded of the refinery capacity "shortage," even though Big Oil has quietly been forcing independent refiners out of business for years.

It's starting to look like capitalism run amok; they are certain to kill the golden goose.

[Up2Late]

25. Yes, but their is MORE! It's far more evil than you describe. Read This.

<http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=132x2151115#top>

(Transcript of "Marketplace" audio at link below)
<http://www.consumerwatchdog.org/co/?postId=5269&pageTitle=Don%27t+Export+the+Oil>

Or read this press release below:

<http://www.consumerwatchdog.org/energy/pr/?postId=5263>

NEWS RELEASE
October 7, 2005

CONTACT: Jamie Court, [phone] ext.327

US Energy Secretary Bodman Should Stop Oil Companies From Exporting of Heating Oil to Drive Up Price

Santa Monica, CA -- As Energy Secretary Samuel Bodman visits Massachusetts today, he should respond to yesterday's letter from the Foundation for Taxpayer and Consumer Rights (FTCR) warning that oil producers' exporting of heating oil will cause unprecedented price spikes this winter if the Administration does not halt the exports. 1.5 billion more gallons of liquid heating products were exported in the first seven months of 2005 than during the same period in 2004.

Click here to read the letter.

FTCR also noted that without regulation of oil producer exports, Bush-backed government subsidies to build new refining capacity could simply result in new product being exported to short the US market and drive up prices.

FTCR President Jamie Court and petroleum industry consultant Tim Hamilton report to the President in a letter yesterday that: "In the first seven months of this year, the oil companies exported over 96 million barrels (4 billion gallons) of fuel oil. The amount is 48 times the volume of the Northeast Heating Oil Reserve. When combined with the propane and natural gas that was also exported, the total export of heating products equates to 58 times the volume held in the entire publicly owned reserve in the United States."

"With winter approaching, oil company exporting has again set the stage for a price spike," Court and Hamilton write. " The consequence could well be an unprecedented increase in the price of residential heating oil, natural gas, and propane. Unlike motorists who have the ability to cut back on driving and gasoline consumption, Americans reliant on these petroleum products to heat their homes face a potentially life-threatening dilemma. As the price of heating oil skyrockets, the only recourse for many on limited or fixed incomes will be turning off their furnaces in the dead of winter. That is why we call upon you to use your executive powers to freeze exports to nations other than Canada."

For more info visit: <http://www.consumerwatchdog.org>

<http://www.consumerwatchdog.org/energy/pr/?postId=5263>

The commentary came at the end of the October 11, 2005 APM's show "Marketplace," links below:

<http://marketplace.publicradio.org/shows/2005/10/11/PM200510117.html>

<http://marketplace.publicradio.org />

[TexasLawyer]

22. But NYT has the good news...

On page B7 in today's (Sat. 10/15/05) business section there is an article entitled

"Shares Rally on Mild Inflation Data and Better Retail Sales."

The article relays the super good news that "core" CPI, which excludes consideration of energy and food, rose just 0.1%.

So no worries. The price of sailboats remains stable.