Inflation Spikes At 26-Year High

Higher Costs For Food, Energy And Meds Push U.S. Wholesale Prices Up Sharply

(AP)  Inflation at the wholesale level soared in January, pushed higher by rising costs for food, energy and medicine.

The Labor Department said Tuesday that wholesale prices rose 1 percent last month, more than double the 0.4 percent increase that economists had been expecting.

The January surge left wholesale prices rising by 7.5 percent over the past 12 months, the fastest pace in more than 26 years, since prices had risen at a 7.5 percent pace in the 12 months ending in October 1981.

The worse-than-expected performance was certain to capture attention at the Federal Reserve, which has chosen to combat a threatened recession by aggressively cutting interest rates in the belief that weaker economic growth will keep a lid on prices.

But the combination of rising inflation and weaker growth raises the threat of "stagflation," the economic malady that plagued the U.S. through the 1970s, when a series of oil shocks left households battered by the twin problems of stagnant growth and rising inflation.

The 1 percent jump in wholesale prices followed a 0.3 percent decline in December and was the biggest one-month increase since a 2.6 percent increase in November. That gain had been driven by sharply higher energy costs.

The big jump in wholesale prices followed a report last week that consumer prices had risen by a worse-than-expected 0.4 percent, reflecting higher costs for food, energy and health care.

The wholesale report said that energy prices jumped 1.5 percent, as gasoline prices rose by 2.9 percent and the cost of home heating oil jumped by 8.5 percent.

Food prices, which have been surging because of increased demand stemming from ethanol production, rose by 1.7 percent last month, the biggest monthly increase in three years. Prices for beef, bakery products and eggs were all up sharply.

Core wholesale inflation, which excludes food and energy, posted a 0.4 percent increase, the biggest increase in 11 months. This gain was led by a 1.5 percent spike in the cost of prescription and non-prescription drugs.

The cost of book publishing was up 1.7 percent while the price of light trucks and passenger cars both rose by 0.3 percent.

Prices excluding food and energy are up 2.5 percent over the past 12 months, the fastest 12-month gain since a 2.5 percent rise in the 12 months ending in October.

[rwassel]

But President Bush said are economy is still strong! And I believe everything that comes out of his mouth. He''s the best president...sorry, I couldn''t do it anymore. Pretending to be a right-wing nutjob is too hard (and scary).

And speaking of all you Bush loyalists, anyone out there care to spin this to make your boy look good?

[omega39-2009]

And speaking of all you Bush loyalists, anyone out there care to spin this to make your boy look good?

Posted by rwassel

I can hear it now, the "leftist" labor department supported by the "drive by media" in a car driven by "Ted Kennedy"............

[simonsez40]

They can spin all they want - the numbers, the economy, the lack of consumer confidence, the fact that foreclosures were up 57% last month - all says UP YOUR''S AMERICA - from George W.

[mcvet]

Oh but McCain has the solution! Cut taxes to the Rich, that will "Trickle Down" to us lower level workers, Cut spending (where he will never tell us) and I will balance the budget! Sound fimular? Well it should they''ve been singing the same tired old garbage for 30 years now. The problem? Cut Taxes to the RICH is all that they''ve EVER done. The rest? Like Bush it''s all a big LIE!! Sieg Heil Bush

[simonsez40]

If what has happened is truly making you a Happy American, then you are surely against the average American in this nation. You will then not be surprised that corporate tax-loop holes allow companies that move overseas to NOT pay one penny in tax until those profits are returned to the United States - not so good for average John and Mary trying to make ends meet. Also 28 of the top American Corporations paid NO income tax last year. The claim that Democrats are raising taxes on Corporate America is a conservative Republican scare tactic (much like what got us into this war and the invasion of a soverign nation). If Corporate America is threatened to pay tax on profits made abroad (and I would suggest at a more hefty rate than those here in the U.S. trying to compete and keep "Made in America" - then all the better) I do believe some of those Dubai headquarters and China investment funds will close and dry up quick. As for me and my household - let the battle begin. The poor have got nothing to lose and the middle class is about to lose everything in this gilded age of George W. Bush. Be happy American -your days are numbered - it''s time for the real hard-working Americans to reclaim this nation.

[omega39-2009]

You will then not be surprised that corporate tax-loop holes allow companies that move overseas to NOT pay one penny in tax until those profits are returned to the United States -
Posted by simonsez40


And as I recall, they have had at least one tax amnesty over the last seven years to allow those companies to move their profits in to the US untaxed.

[fstop100]

You must be mistaken, Georgie boy says everything is fine.

[walt1944-2009]

The Great Emperor Bush II and the neocon Fascist Nazi Republicans are still insisting that there is NO recession!

This despite an annual inflation rate of 7.5% which hasn''t been seen since the "disaster days" of Jimmy Carter, even surpassing the "non-recession" of the Great Emperor Bush I in 1991!

The government of the Great Emperor Bush says that the reasons are higher energy costs pushing up the price of everything! The government, however, refuses to address the real issues here which are the ASTOUNDING corporate profits being made by energy companies (who are still asking for more!) and the associated higher profits being made by other companies claiming their costs are going up.

It is the "Ferengi Economy" at work to its fullest with huge profits being made by business and billionares, BUT NO PROFIT BEING REALIZED BY YOU!!!!
The new "god" of PROFIT is being worshipped in every corporate boardroom, politician''s office, and stock market throughout the land and a church to the new "godhood trinity" of EXTORTION, THEFT, AND GREED, will be built next to the Great Emperor Bush II''s summer home in Texas!!!

SIG HEIL, BUSH!!!!
sig heil, McCain???

[thecossack7]

Like I was saying earlier: My old college roommate, an electrical engineer who by far the smartest person in our class, recently announced that he, his wife and 3 kids were picking up stakes and emigrating to Germany. I was shocked by the announcement and asked him why.

In his words: "The USA is ruled by a predator class and nobody, Democrat or Republican, has the power to challenge or dislodge them. If you''''re an engineer or scientist in the USA, it''''s over for you-- your job *will* get outsourced to India at one point and it''''s only going to get much, much worse. And if you own a home, don''''t think for a moment that the problem is only "subprime"-- subprime is just the tip of a tsunami wave that''''s soon going to overwhelm homeowners of any credit once the rates uptick.

And finally, we are approaching *$10 trillion* in debt. That''''s *trillion*. As the baby boomers retire and we''''re still mired in two losing wars, it''''ll be double that in less than 5 years. And who''''s going to be paying that debt back? That''''s right sport, you and your kids.

That''''s not the future I want for my kids. If you want to survive, learn a foreign language and at least have contingency plans to move. If you''''re in business learn Chinese, if you''''re in a SW state learn Spanish, if you''''re in engineering or the sciences get some language tapes, take a course or whatever and learn German.

[thecossack7]

cont''d:

"I learned enough German to get set up in Germany and I''m happily taking the offer. You have to be skilled and preferably professional-- bonus if you want to start a business-- but they''ll take you if you have something to offer. I highly recommend it. Don''t get stuck on a sinking ship. My kids will be raised as Germans but we''ll still love the USA-- at the very least, we''ll love what the USA *once was* decades ago before this mess, but sadly never will be again."

[killtheliars]

there are things that can be done to help Americans. For instance, if the price of wheat is shooting up because of so called supply and demand, then limit the amount of wheat you ship overseas, therefore leaving more supply here. furthermore stop expecting americans to pay more for wheat then people in other countries. Make a universal price, those who can pay it get to buy wheat those who cannot don''t. It is the same idea with pharmacuticals. Don''t charge a consumer in the U.S. more then a consumer in Europe or Africa, just becasue we have more disposable income. This is another way they are redistributing wealth. We in the U.S. pay more so those with less can afford the same things. That may have been ok before but now that we are felling the pinch it is time to look out for #1.

[tucano2]

Folks, you ain''t seen nothing yet.

[lochlan-2009]

Folks, you ain''''t seen nothing yet.


---------

Posted by tucanofulano

They have no idea.

[lovegetpeace]

Wonderful, let me see, I easily see at least 8 more new Democratic Senators in Nov-2008 for a solid Filibuster proof Congress for the next new Democratic President. No need to compromise with the Republicans to get anything done.

Now, I feel sorry for the NeoConservatives.

[lovegetpeace]

Thank you very much NeoConservatives, I am so happy for your Tax Cut only ideological policy. You are right where I wanted to see you all.

[drputt45]

So, is Exxon feeling the affects of this inflation? Maybe they should be paying out the tax rebates this year rather than uncle Sam.

[lovegetpeace]

Finally, Bush''s ''Mission Accomplished'' was successfully completed.

[lovegetpeace]

Hay drputt45,
Uncle Sam cannot provide Tax Rebates because it is effectively broke. The Chinese save their earnings in Chinese banks. Then, Chinese banks loan it to the US Federal Reserve bank. Finally, the Federal Reserve bank prints the tax rebate checks. Thank you Chinese for feeling so sorry for Americans.

[observer2020]

Taxes...hmmm...how about taxing the people who come here and have green cards that owns businesses? They pay no taxes on the money they''re taking from Americans...and they''re not citizens. Even make the tax a little higher and say if you become an American citizen, we''ll lower your taxes. Gives them incentive. I say tax them and tax big corps just as you do all the rest of us little people. TAX...is AX to a T! And the US is getting AX''d to death...or at least our paychecks are.

[Gary Kempf]

Someone explain how a "Conservative Republica" works.
Conserve personal wealth,
Conserve Corporate wealth,
Let illegal immigrants flood into the U.S. and take jobs away from American citizens,
Allow oil companies and oil speculators take advantage of natural disasters,"hurricanes", to push and push the price of oil up.
Oh yea probably the best one, is to walk away after driving the country broke and making millions in blind trust from oil and holliburton contracts.

This to me is a "Conservative Republican"

[terrapin78]

Way to govern Repugs.

Everything is soooooo muuuuch better now that you have been in charge of Congress from 1994- 2007 and The WH 2000-present. ANd safer too! LOL

Thanks!
(this is sarcasm if you had not figured it out)

[observer2020]

You said it Sun247! I agree totally with what you said about SSI.

[kennergirl]

It''s the big corporations that should be taxed more. I bet most of them pay hardly anything at all in taxes compared to how much money they make as profit. Just look at the oil companies alone. While they raking in billions in profits the poor middle class are stuck paying over $3.00 a gallon driving to our pathetic paying jobs. A gallon of milk and a dz.eggs cost about $5 and $2 respectively. That is truly pathetic. What it boils down to is the rich get richer, the poor at least can get help from the government and the middle class just get screwed...again!

[kennergirl]

Oh, and what I forgot to say the last time was this...

Instead of sending millions/billions to everywhere else in the world (including Iraq) what about taking care of home first? We as United States citizens deserve better than what we have. A country like this one should have the greatest schools, the greatest healthcare, the least amount of poverty. We don''t and we are a long way from even coming close to being that way too. I think everybody would agree with me on this because I am sick about hearing how much money is going everywhere yet there is so much suffering going on right here.

[ianlou]

OK, per our NeoCon friends, this is the history leading up to today''s economy:
Bill Clinton enjoyed the delayed results of the economic policies of George Sr. George Jr. is suffering from the delayed mistakes of Bill Clinton.

Prediction: Any turn around in the current disastrous economy that takes place when the Dems get Washington back will be attributed to the delayed results of the economic policies of George Jr.
And who says there isn''t a method to madness.

[noloyalisti]

Bush and the neo con men crime family have learned well from the Milton Friedman crowd and the Nazis. Privatize everything and once the government is owned by big business, voila, you have fascism.

According to Friedman, wars are even good because it enables you to have chaos which enables the fascists to move in and take over economically. Who would have thought we would let this happen in America.

Actually the republiscam conervatives have gotten what they wanted. I just don''t understand how working people could support their lunacy. We need to hold conservatives responsible for their votes and let everyone know what we think of them. Constantly.

[denn034]

The recent actions of the Fed to lower interest rates Banks charge will solve this problem.

[harp1963]

It''s all the Democrats fault, even though the Republicans have been in charge 20 out of the last 28 years. Keep voting Republican. The suffering of poverty will finally unite Americans.

[observer2020]

Actually, my vote is for: None of the Above!

[shanev137]

Where are all the stupid, kool-aid drinking, bush lovers to deny that there is no inflation and that the media is just lying and making this up??

[noloyalisti]

This inflation was totally predictable when the Fed started dropping interest rates. That cheapens the currency and also causes the stock market to rise. It actually has nothing to do with real wealth or prosperity. Only getting rid of the conservative ideology of economics, famously promulgated by the 2nd worst president of all time, Reagan, will start to solve the stagflation. But it''s going to be a long haul and will likely get much worse because of the war spending.

[shanev137]

The recent actions of the Fed to lower interest rates Banks charge will solve this problem.


----------


hahahaha.....the FED is the one who is creating inflation. You don''t lower interest rates after inflation has already hit and the value of your currency is in the toilet....you raise them.

Hey junior, go back and take an econ101 class.

[missingamerica]

26-year high, eh?

Ok, people:

Are you better off since the first liar told the "trickle down" lie, or not?

Better yet, do you think those "trickle down" lies will create a better or worse future for your children than you had?

lolllllll.....

[cyberus-2009]

*Trickle Down Economics*
A condition where the rich stand above you and whizz on your head and tell you its Golden Rain

[mcv57]

I am voting for Ralph Nader; it''s him or Bozo the Clown. Sad thing, but if Bozo ran for president, the other clowns would probably beat him in the General Elections.

[random_radar]

The rich get richer because they understand the economic system. The poor get poorer because they believe the lies the rich tell them about inflation, credit, and banking.

If you feel compelled to complain about the rich taking advantage of you while you become poorer, you might want to open your mind and seek the truth about economics. Not that it will be easy to find since you probably can''t believe it, but if you could understand the truth, you would prosper and become rich.

[inventagod]

Hmmm - Inflation thru the roof, massive foreclosures...
We are nearing the end of another Republicon cycle...

Democrats man the cleanup stations!!!

[tylenol6]

*****Alan Greenspan is telling the Gulf states to DROP
the dollar!!!!!! Greenspan has said inflation rates in
the Gulf states which are reaching record levels, would fall significantly if oil producers dropped the dollar peg. People, if the Gulf states dropped the dollar, OUR ECONOMY WOULD COLLAPSE!!!! GREENSPAN WANTS TO TANK THE DOLLAR INTENTIONALLY AS SO THE PLAN IS SO THEY CAN BRING IN THE EURO. WAKE UP PEOPLE!!!!!! This
is all for the NEW ONE WORLD GOVERNMENT.

[incog-nito]

President Bush will be making a major announcement soon: "There is no recession. Let me repeat: There is no recession."

[mcv57]

President Bush will be making a major announcement soon: "There is no recession. Let me repeat: There is no recession."

Posted by incog-nito

The bushwacker is already making his announcements, his corporate establishment is calling the U.S. economy: "stag-flation"

[gce65]

It''s amazing that with this inflation news and housing foreclosures up 57% the stock market still continues to gain in the last few days. Yet again more proof that the markets are not related to the economy or reality in any way.

[gce65]

mcv57:
Yep, stag-flation is stagnation in growth coupled with inflation. It''s what we had in the 70''s I think.

[fstop100]

Record Corporate profits and record corporate executives salaries and golden parachutes could be a part of the problem. But Georgie Boy says no problem.