Who says government drones don’t have a sense of humor? Even though wholesale prices surged by 0.7% in one month, the government actually reported that food prices fell. I bet that is making you choke on your can of cat food you are eating because you can’t afford human food anymore. But, even using the badly flawed and manipulated government numbers, wholesale inflation is running at an annualized rate of 12% over the last three months. This means that companies have two choices: 1) eat the increase in their costs and reduce their profits by 12% or 2) pass the 12% increase onto you by either increasing the price or reducing the size of their products. Which do you think they are doing?
And oh yeah, unemployment claims surged back above 400,000 this week. We are two years into a supposed recovery and unemployment claims are higher than they were during the 2001 – 2002 recession. CNBC says it’s the best time to buy stocks.
Can you say – DOUBLE DIP RECESSION?
U.S. wholesale prices rise 0.7% in March
By Jeffry Bartash, MarketWatch
WASHINGTON (MarketWatch) — U.S. wholesale prices rose sharply in March, spurred once again by higher gasoline costs, but food prices fell for the first time in seven months.
The core rate, which excludes the volatile food and energy categories, rose 0.3% in March. Higher prices for light trucks accounted for a large chunk of the increase.
Economists surveyed by MarketWatch had predicted a 0.8% increase in overall producer prices and a 0.2% increase in the core rate.
Investors and the Federal Reserve usually view the core index as a better gauge of inflationary pressure because it excludes food and energy, prices of which often fluctuate.
Yet the sharp and steady increase in food and energy costs could pose a threat to a fragile U.S. recovery, economists warn. Demand for many other consumer goods and services — the linchpin of economic growth — usually fall when people have to spend more money on basic necessities.
Over the past year, wholesale prices have jumped 5.8%, stoking concerns about higher inflation. Other price indicators have also flashed warning signs.
If wholesale prices keep rising, however, companies eventually will have pass along more of their costs to their customers.
The wholesale report provides “further evidence that recent gains in oil and commodity prices are putting upward pressure on a goods prices beyond energy and food,” economist Peter Newland of Barclays Capital said in an email.
The spike in wholesale prices has largely been driven by a surge in petroleum. Energy costs rose 2.6% in March, and they’ve shot up 17.6% over the past 12 months.
Higher gasoline prices, which jumped 5.7%, drove most of the increase.
Wholesale food prices fell 0.2% in March – the first decline since last August — one month after posting the biggest gain since 1974. A 21.4% drop in the price of fresh and dry vegetables accounted for the decrease.
Still, the price for food paid by producers has risen 4.4% over the past year.
Also in the wholesale report, the price index for intermediate goods rose 1.5% in March. Core intermediate prices excluding food and energy, viewed as a leading indicator of inflation, jumped 0.9%.
Intermediate products are items such as flour, processed from wheat, before it is made into bread.
Weekly Initial Unemployment Claims increase to 412,000
In the week ending April 9, the advance figure for seasonally adjusted initial claims was 412,000, an increase of 27,000 from the previous week’s revised figure of 385,000. The 4-week moving average was 395,750, an increase of 5,500 from the previous week’s revised average of 390,250.
Colma Rising says:
Miller is not Corona, Folgers isn not whole-bean, spam is not bacon, hamburger is not steak, velveeta is not cheddar and drum roll-ur-own ciggies aren’t American Spirits!
(I count whiskey and tobacco as food)
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14th April 2011 at 10:56 am
brann says:
still time to get that garden in.besides,it is good work for the soul and mind.
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14th April 2011 at 11:16 am
Colma Rising says:
Brann:
So very true. I’ve got artichokes, spinach and broccoli sprouting… carrots too but I can’t tell them yet they’re tiny and look like weeds.
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14th April 2011 at 11:27 am
The Watchdog says:
@Admin
Minor note: a 12% rise in input costs that isn’t passed through to the final product won’t cut profits by 12%, it will will cut profits much more than that. If my gross margin is 30% then the widget I sell for a buck costs 70 cents to make. Increase that to 78 cents and my gross profit goes from 30 cents to 22 cents, a drop of 27%. Throw in SG&A and my net profit probably drops by 50%. Your argument is correct, but understated.
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14th April 2011 at 11:42 am
Administrator says:
Watchdog
See. You prove once again that I’m a raving optimist.
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14th April 2011 at 11:50 am
Snake says:
Did you sell your silver too soon?
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14th April 2011 at 12:33 pm
Welshman says:
Growing food is important, but learning how to grow is even more important. Well put Brann.
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14th April 2011 at 12:44 pm
StuckInNJ says:
I have recently completed a self study course from Georgetown University called “Manipulating Numbers the Government Way”.
Accordingly, I do, indeed, have an eleven and a half inch cock and can keep an erection for two full days.
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14th April 2011 at 1:01 pm
Snake says:
What would happen to silver if/when the US defaults.
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14th April 2011 at 7:42 pm
howard in nyc says:
i was gonna start a vegetable garden. but then i though, why bother? i’ll just rip off stuck’s garden.
(i keed, because i love)
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14th April 2011 at 12:37 am
English Rose says:
JimQ wrote
“And oh yeah, unemployment claims surged back above 400,000 this week. We are two years into a supposed recovery and unemployment claims are higher than they were during the 2001 – 2002 recession”
Admin wrote
“The false storyline that there are no jobs is a crock of shit”
So to summarise, we have “surging” unemployment amongst middle aged, white, educated Americans from nice neighbourhoods……..
And fucking ignorant, lazy bloodsucking Free Shit Army niggers living in the 30 Blocks.
Never let double standards get in the way of a good story Jim Queen.
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14th April 2011 at 3:10 am
Novista says:
ER
I admire they way you’re an equal opportunity insulter: middle-aged, white, and educated.
“Three strikes and yer out!” Well done.
What do you have against old, semi-white, and always learning? There must be something …
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14th April 2011 at 6:46 am
Administrator says:
English Rose
Are you excited about the upcoming inbred royal wedding?
I see you are still incapable of holding two competing thoughts in your tiny pea brain.
Thanks for letting everyone on the site know why we broke away from jolly old England – too much imbreding leading to a plunge in IQ and ability to interpret reality.
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14th April 2011 at 8:05 am