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May 13, 2011

Say hello to inflation, as gas, food, and energy costs escalate

Topics: Political News and commentaries

If you feel like you're paying more and more for gas, food, and energy, you're absolutely right. Inflation has arrived.

From the NY Times:

[...] The Labor Department said in its monthly report that the Consumer Price Index, the most widely used measure of inflation, was up 0.4 percent in April from March, and up 3.2 percent from a year earlier. The 12-month figure represents the biggest jump in the index in any 12-month period since October 2008.

Analysts had forecast the same monthly rise but a slightly smaller increase for the year, at 3.1 percent.

Food and gasoline price rises accounted for most of the increases, with gasoline accounting for almost half of the month-to-month rise.

Food prices were up 0.4 percent in April, smaller than the 0.8 percent rise in March as prices for fresh vegetables slowed their advance. Energy prices rose 2.2 percent in April, the 10th consecutive monthly increase, although the rise was smaller than the jumps of 3.5 percent in March and 3.4 percent in February, the report said.

Gasoline prices were up 3.3 percent in April. According to the report, energy prices have now risen 19 percent over the last 12 months, with gasoline prices up 33.1 percent.

So, is there a Bernanke-Obama stagflation coming our way?

Some folks believe there is, take for example Quin Hillyer ... who says a public that sees its grocery and gasoline costs rising precipitously will not be mollified by bland reassurances that amount to a great big "Trust Us" sign.

And then there's Joseph Klein who says that we can look for more distractions coming from the White House to divert attention away from President Obama's pitiful economic record of huge deficits and stagflation. But Americans will be reminded every time they fill up their gas tanks, buy groceries or look for a job.

In the meanwhile, as pointed out in the above NYT article, the Fed says not to worry ... everything is under control and the price inceases we're seeing are "transitory."

Somehow, that just doesn't sound very encouraging to me. How about you?

Related: Ben and Barry's Inflation Problem

Posted by Hyscience at May 13, 2011 1:12 PM

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