Thursday, April 22, 2010

Wholesale Food Price Jumped Most in 26 Years, But No, There Is No Inflation!

Wholesale food price jumped 2.4% in March, the biggest jump in 26 years, due to 49% rise in vegetables. But don't worry, we don't have inflation, we are told. Excluding the "volatile" food and energy cost, the wholesale inflation (Producer Price Index, or PPI) in March was mere 0.7%.

Wholesale prices rise in March as food costs jump
(4/22/2010 AP via Yahoo Finance)

"WASHINGTON (AP) -- Wholesale prices rose more than expected last month as food prices surged by the most in 26 years. But excluding food and energy, prices were nearly flat.

"The Labor Department said the Producer Price Index rose by 0.7 percent in March, compared to analysts' forecasts of a 0.4 percent rise. A rise in gas prices also helped push up the index.

"Still, there was little sign of budding inflation in the report. Excluding volatile food and energy costs, wholesale prices rose by 0.1 percent, matching analysts' expectations.

"Food prices jumped by 2.4 percent in March, the most since January 1984. Vegetable prices soared by more than 49 percent, the most in 15 years. A cold snap wiped out much of Florida's tomato and other vegetable crops at the beginning of this year.

"Gasoline prices rose 2.1 percent, the department said, the fifth rise in six months.

"In the past year, wholesale prices are up 6 percent, with much of that increase driven by higher oil and other commodity prices. But the core index, which excludes food and energy, rose only 0.9 percent." [The article continues.]

Well, for struggling families in the US, all that they purchase with their money may be food and gas. It's very small comfort to be told that we don't have inflation if food and energy are excluded from the calculation.

In the meantime, the president of the US of A is busy hyping Value Added Tax for his ever-increasing programs and initiatives so that we can forever stagnate like Europe, and the increasingly bold (to the point of being obnoxious) government union workers demanding that the income tax be raised so that they can keep their jobs with generous benefits.

And the tax-paying public will simply roll over and surrender to their demands. Or will they?


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