http://news.yahoo.com/s/afp/20080715/pl_af...on_080715173801


US wholesale inflation jumps 1.8 pct in June
Tue Jul 15, 1:38 PM ET



WASHINGTON (AFP) - US wholesale inflation jumped a surprisingly strong 1.8 percent in June from May amid soaring energy and food prices, the Labor Department said Tuesday.

The headline increase in the department's seasonally adjusted producer price index, a gauge of inflation at the wholesale level, was the steepest since November and sharply exceeded market expectations of a 1.3 percent rise.

Core wholesale inflation, excluding volatile energy and food prices, was up 0.2 percent for the second month in a row, slightly lower than the consensus forecast of 0.3 percent.

On a 12-month basis, PPI soared 9.2 percent in June, the largest increase since June 1981.

The headline PPI advance in June followed gains of 1.4 percent in May and 0.2 percent in April.

The stronger-than-expected headline inflation data was the latest in a series of reports that have put the US Federal Reserve on alert against building price pressures amid a weak economy.

The PPI report was released ahead of testimony by Fed chairman Ben Bernanke to the Senate Banking Committee on the state of the US economy.

The Fed chairman, delivering his semiannual forecast to Congress, indicated that his outlook for better growth and cooling inflation remained subject to a "high degree of uncertainty."

The central bank forecast 2008 growth in a range of 1.0 to 1.6 percent, up from an April projection of 0.3 to 1.2 percent. The inflation outlook was hotter at 3.8 to 4.2 percent for overall prices but the outlook for "core" inflation excluding food and energy was unchanged at 2.2 to 2.4 percent.

Global Insight economist Kenneth Beauchemin pointed out that global competition and moderate labor costs were helping curb US inflation.

"The Federal Reserve continues to find a patch of blue sky with moderately rising core prices in the face of massive energy and other commodity prices hikes," Beauchmenin said.

"Why the disconnect? Not only has globalization intensified price competition, but also, the US labor market continues to unwind allowing only modest gains in labor compensation that keep labor costs in check."

The Labor Department said energy prices leapt 6.0 percent in June following a 4.9 percent gain in the previous month. The gain was led by a 6.6 percent jump in residential natural gas prices after a 3.8 percent rise in May.

By contrast, unleaded regular gasoline prices cooled to a 9.0 percent rise following a 9.6 percent increase in the previous month.

Food prices climbed 1.5 percent in June following a 0.8 percent rise in May. Prices of fresh and dry vegetables advanced 14.7 percent after declining 9.0 percent in the preceding month.

Excluding food and energy, the headline PPI advance was driven by passenger cars, pet food, aircraft and aeronautic equipment.

And they call this conservative economics!!!!

there are those who still wish to add Reagans bust to Mt Rushmore.



Edit to add......


Would that then make Reagan a really big (dead) boob?

Speaking of Ronald, I believe his presidency was the main cause of family homelessness in America that's how I remember Reagan!

I have two of many memories of Ronald Reagan, the first of which is him Firing the Patco, air Traffic controlers,and second how after so many dead and infected with AIDS he finally came to terms that the virus was out there when a weathy Republican Woman was infected with the AIDS virus and then he began to act on the knowlege!! Another GOP saint I could have done with out in my life!!!

My impression of reagan will always be the term, "trickle down" and how I felt "trickled on".
Because of his economic policy I was out of work, couldn't get even a gas pumping or burger flipper job, for 13 months.
Considering the unemployment ins ran out long before then, it hurt big time. Especially considering the wealthy people just kept on gettin wealthier, thanks to trickle down economics.

I had to dig around to find this.

The current rate of inflation in the US is 5%.

FIVE PER CENT.



http://www.telegraph.co.uk/money/main.jhtm...cnusecon117.xml