Once the government declares that all new buildings must be made of Nerf and all vehicles will run on Jell-O, we’ll be able to put this inflation nonsense to rest.
Wednesday’s producer prices numbers from the government again showed that the stuff we use to make more stuff and run the stuff we need to get our stuff to market is getting more and more expensive.
Consider a few of these juicy tidbits:
- The unadjusted Producer Price Index rose 3.6 percent over the past 12 months ending January;
- The index for diesel fuel, which runs those big trucks that bring all that aforementioned stuff to the aforementioned market, jumped a startling 7.2 percent in one month;
- The iron and steel scrap index (measuring that stuff we use to build buildings) soared 13.6 percent in the past month as well. That accounted for more than 80 percent of the month-over-month increase in the PPI;
- Crude energy materials exploded 17.3 percent in the past three months; for the previous three months the gain was just 4.3 percent.
According to an analysis from Dave Resler, chief economist at Nomura Securities, the main pressures in the so-called “core” PPI are coming from “jumps in the price indices for alcohol, pharmaceuticals, tires, toys and athletic goods, and jewelry.”
So other than beer, medicine, cars, stuff for your kids and bling, inflation worries are meager—oops, forgot to add food and energy to the list as well, since they aren’t part of the “core.”
Yet we have government economists insisting that inflation remains some faraway threat from another land, nothing about which we need worry.
One wonders sometimes whether the various government agencies in charge of the economy actually read each other’s reports.
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