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Posted by on June 13, 2008, 1:14 pm
http://biz.yahoo.com/ap/080613/economy.html
Inflation rate jumps by biggest amount in 6 months
Friday June 13, 11:53 am ET
By Martin Crutsinger, AP Economics Writer
Inflation rate jumps 0.6 percent in May, reflecting higher energy
prices
WASHINGTON (AP) -- The inflation rate shot up in May at the fastest
pace in six months, pushed higher by soaring costs for gasoline and
other types of energy.
The Labor Department reported Friday that consumer prices rose by 0.6
percent last month, the biggest one-month increase since last
November, as gasoline costs surged by 5.7 percent. Food prices, which
have also been rising sharply, were up 0.3 percent as the cost of beef
and bakery products showed big gains.
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Core inflation, however, which excludes energy and food, edged up a
more moderate 0.2 percent in May. That increase was right in line with
expectations and should help relieve worries that the big increases in
food and energy could be breaking through to more widespread
inflation.
Ian Shepherdson, chief U.S. economist at High Frequency Economics,
said that the moderate gain in core prices showed price pressures are
remaining contained despite fears at the Federal Reserve.
The Fed, which from September through April was aggressively cutting
interest rates to fight a mounting economic slowdown, is now
indicating that its biggest concern has changed from the threat of a
recession to worries about inflation.
In a speech Monday, Fed Chairman Ben Bernanke said that the Fed will
"strongly resist an erosion of longer-term inflation expectations."
Those comments have raised expectations that the Fed's next move later
this year will be to start raising interest rates.
The 0.6 percent rise in overall prices was slightly higher than the
0.5 percent gain that economists had been expecting while the 0.2
percent rise in core prices matched expectations.
So far this year, consumer prices are rising at an annual rate of 4
percent, compared with a 4.1 percent increase for all of 2007.
Energy prices are rising at a 16.5 percent annual rate, compared with
a gain of 17.4 percent for all of 2007, while food prices are rising
at a 6.3 percent annual rate, up from a 4.9 percent increase for all
of last year.
Analysts said the pressure in both the energy and food areas is likely
to continue as global food shortages and rising demand push food
prices up and energy costs continue to soar, reflecting a relentless
surge in crude oil prices.
The energy increases have pushed the nationwide average for gasoline
up to a record of $4.06 and private economists believe that price will
keep climbing through the summer driving season.
The combination of rising inflation and weak wage gains contributed to
another drop in weekly earnings. After adjusting for inflation, weekly
earnings for nonsupervisory workers were down 1.2 percent in May,
compared to a year ago, the Labor Department said in a separate
report.
Energy prices were up 4.4 percent in May after being unchanged in
April. The increase was led by a 5.7 percent jump in gasoline, the
biggest one-month increase since last November, and gains of 0.9
percent for electricity, 10.4 percent for home heating oil and 5.6
percent for natural gas.
The 0.3 percent rise in food costs reflected a 1.5 percent jump in
beef costs, the biggest rise in 13 months, and another steep increase
in cereal and bakery products, which were up 1.6 percent.
Outside of food and energy, clothing costs fell by 0.3 percent and the
cost of prescription drugs dropped by 0.7 percent, but airline tickets
jumped 3.2 percent, the biggest gain in more than six years,
reflecting the surge in fuel costs.
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Posted by Mani Deli on June 13, 2008, 2:18 pm
The inflation rates issued by the Bureau of Lying Statistics are pure
Bullshit!
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Posted by FrediFizzx on June 13, 2008, 2:27 pm
> The inflation rates issued by the Bureau of Lying Statistics are pure
> Bullshit!
Buy a house. Prices are way down. One of the best ways to beat
inflation long term.
Fred
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Posted by Lubow on June 13, 2008, 4:05 pm
Hello, FrediFizzx!
You wrote on Fri, 13 Jun 2008 11:27:34 -0700:
Lubow.
>> The inflation rates issued by the Bureau of Lying Statistics are pure
>> Bullshit!
>Buy a house. Prices are way down. One of the best ways to beat inflation long
>term.
Maybe in mid-January. That's when we get to see the submerged part of this
iceberg.
>Fred
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Posted by ajames54 on June 13, 2008, 4:14 pm
> Hello, FrediFizzx!
> You wrote on Fri, 13 Jun 2008 11:27:34 -0700:
>
-> Lubow.
>
> >> The inflation rates issued by the Bureau of Lying Statistics are pure
> >> Bullshit!
> >Buy a house. Prices are way down. One of the best ways to beat inflation
long
> >term.
>
-> Maybe in mid-January. That's when we get to see the submerged part
of this
-> iceberg.
>
I don't know about that, Jan '09 marks the beginning of a wave of
Interest only Mortgage resets.. not as big as the Sub Prime wave true
but ..
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