Wholesale Prices Rise in 2007 by 6.3 Percent, Largest Amount in 26 Years

[babylonsister]

Wholesale prices rise 6.3 percent in '07

Wholesale Prices Rise in 2007 by 6.3 Percent, Largest Amount in 26 Years

MARTIN CRUTSINGER
AP News

Jan 15, 2008 09:20 EST


Wholesale inflation last year shot up by the largest amount in 26 years while retailers suffered their worst December shopping season in five years as mounting economic woes caused consumers to put away their wallets.

The Labor Department reported that wholesale inflation was up 6.3 percent for all of 2007, reflecting a huge increase for the year in various types of energy costs ranging from gasoline to home heating oil.

Meanwhile, retail sales fell by 0.4 percent in December, the worst showing in six months, the Commerce Department reported. Consumer confidence has plunged, reflecting the worsening housing slump and a lingering credit crisis.

For inflation, the year ended on a more positive note, with wholesale prices falling by 0.1 percent in December. That reflected decreasing costs last month for gasoline and other energy products. It was a significant slowdown after prices had soared by 3.2 percent in November, which had been the biggest one-month increase in 34 years.

The combination of rising inflation pressures and a weak economy represent a dilemma for the Federal Reserve over whether to cut rates to boost economic growth even at the risk of making inflation worse.

more...

http://talkingpointsmemo.com/news/2008/01/wholesale_prices_rise_63_perce.php

[Johonny]

1. but the surge is working

We must stay in Iraq for a million years.

[jojo54]

2. Recession, anyone?

"Wholesale inflation last year shot up by the largest amount in 26 years while retailers suffered their worst December shopping season in five years".

This includes everything from a dinner rooll to a gallon of gas. Need we say more?

[newportdadde]

3. Everything is fine! CORE inflation is ONLY 2%

"However, core inflation, which excludes energy and food, was better behaved, rising by 2 percent last year, the same as in 2006. The Fed is closley watching core prices for any signs that the price pressures being seen in energy and food are starting to spread to other parts of the economy."

Studies show when Newport excludes his food and energy costs his wages are through the roof!

[ProfessorGAC]

5. Not Only Are You Comments Correct, But . . .

. . .core inflation is higher than stated there. It may only have risen by 2% (annualized) in December, but is over 2.8% for the year. Given the critical consumables left out of that market basket, this is VERY high.
The Professor

[Winterblues]

6. I wonder if Gold and Precious Metals are included in Core Inflation?

They certainly are not food or energy. :shrug: and I believe they have risen a little more than 2%

[dkf]

4. This is not good

yuck.