Producer Prices: Biggest Gain Since '90

[Zorra]

WASHINGTON (Reuters) - U.S. producer prices shot up 1.7 percent last month, the biggest gain in nearly 15 years and well above expectations, as energy costs skyrocketed and food prices surged, a government report showed on Tuesday.
snip---
The report fanned inflation fears and pushed both U.S. bond and stock prices down. The blue chip Dow Jones industrial average (^DJI - news) was down over 50 points in late morning.
snip----
Energy prices soared 6.8 percent last month, the steepest climb since February 2003, with gasoline, home heating oil and liquefied petroleum gas also posting sharp gains. Residential electricity costs also moved higher.

Food prices increased 1.6 percent, their biggest gain in a year. Vegetable prices rose 34.2 percent, their largest jump in over 8 years, and the cost of fruit climbed 11.3 percent.

http://story.news.yahoo.com/news?tmpl=story&cid=580&e=1&u=/nm/20041116/bs_nm/economy_dc

[linazelle]

1. They finally let the cat out of the bag...post election

If this kind of info had been released before the election, people might have been thinking about something other than "moral values" (not that they weren't anyway).

[denverbill]

2. That's what happens when you print money like it's going outta style.

Running a $500 billion budget deficit and $200 billion or more trade deficit and sooner or later the dollar will plummet and inflation will automatically rear it's ugly head.

After all, if an American had been selling a pound of beef to Americans for $2.00, but the drop in the value of the dollar means a European would pay $4.00 for the same pound of meat, who do you think the farmer is going to sell to? And with less beef available in America, prices go up.

The only thing different from the 70's is that workers have little economic muscle to demand salary increases in line with inflation, and also that inflation is measured much, much differently now. I'd bet inflation is currently running about 10%/year, rather than the 1-2% they keep claiming. Food prices, gas prices, heating prices, raw material prices.....every one of them is up pretty dramatically over the last 4 years.

[Wright Patman]

3. The trade deficit

is more like $600 billion a year at this point.

[louis-t]

4. No, no, inflation is likely 'cause the economy is so great

it's really, really superheated so we has to cool it off by raising interest rates. Really. You don't believe me? Ask any of the repub financial genius morons I have to listen to every day.

[PROGRESSIVE1]

5. Larry Kudlow a "financial genious'?

hahahahahahahaha

Really, it isn't funny at all.

[BlueManDude]

12. One of these years he'll be right

if he hangs around long enuf eventually Larry will look like the genius that some idiots believe him to be.

[denverbill]

6. The problem is..

they are right, sorta. They have to raise interest rates, but the reason they have to raise interest rates is to keep a lid on inflation. But this inflation isn't being caused by an overheating economy, unlike the 90's, where full employment pushed wages up. This is being driven by out of control spending by the borrow and spend party.

[louis-t]

8. and by oil prices which affect a large part of the

economy.

[BlueManDude]

11. you mean the grownups? the fiscally conservative party?

i need a vacation.

[schultzee]

7. Anyone who goes grocery shopping could see the inflation

[louis-t]

9. I keep hearing that but...

where I shop, everything has been on sale for a year. I have never seen so many yellow sale tags. 10 for $10.00, 3 for $3.00. Meat and dairy prices are high, but I don't buy much meat or dairy. I can buy a gallon of OJ for $2.50, wheat bread for $.89, peanut butter is $1.69, Kroger brand cereal for $1.50, vitamins 2 for 1 or $3-4 off a bottle. Michigan economy not doing as well as other states.

[BlueManDude]

10. great - throw a little inflation into the mix.

2004 - the end of accountability.

[skooooo]

13. Clinton's fault

[brook]

14. Nah...

It's the damned 'clenis' again! :-)

[indepat]

15. Raging inflation is such a small price to pay to keep us safe.