Wholesale prices rise 0.3% in April unexpectedly

May 14, 2009 by · Leave a Comment
Filed under: Economic News 

With all this cash deployed in the economy, an actual turn around will make the inflation baked into the system show its head.  I am listening to an interview with Anna Schwartz, where she talks about how technically the Federal Reserve’s policy are going to prevent them from dealing with this massive price inflation because they do not have enough Treasuries to offer to sap this extra money from the system.  Very interesting indeed.

News (AP): 

Wholesale prices rose more than expected in April as the biggest jump in food costs in more than a year offset a second monthly decline in the price of energy products.

The Labor Department said Thursday that wholesale prices climbed 0.3 percent last month, a larger increase than the 0.1 percent that economists had expected.

Even with the larger-than-expected April gain, wholesale prices over the past 12 months have fallen by 3.7 percent, the biggest 12-month decline since Harry Truman was president in 1950. While falling prices can raise fears about deflation, economists believe the efforts by the Federal Reserve to combat the recession will keep that from occurring.

The April price increase was driven by a 1.5 percent surge in food prices, the biggest advance since a similar jump in January 2008. The costs of eggs soared by 43.7 percent, the largest monthly gain in records going back 17 years, with beef, pork and vegetable prices also up sharply.

The 0.3 percent rise in the department’s Producer Price Index, which measures inflation pressures before they reach the consumer, followed a 1.2 percent plunge in the PPI in March. The April advance was the biggest one-month gain since wholesale prices jumped 0.8 percent in January.

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