July 15, 2005

DON'T BOTHER US WITH REALITY, WE'RE TIMESMEN:

Inflation Remains Flat Despite Energy Costs (VIKAS BAJAJ, 7/15/05, NY Times)

Wholesale prices, an early indicator of inflation in the economy, were unchanged in June, the government reported today, indicating that most businesses are not passing on rising energy costs to customers.

Following a report on Thursday that showed consumer prices were also flat in June, the producer price index numbers provide further confirmation that inflation remains at bay in the current economic expansion.

The core producer price index, which excludes the volatile food and energy sectors, fell 0.1 percent in June from May, the Department of Labor reported.


So, you see, if they go up it's a sign of inflation, but if they go down it's a sign that businesses are hiding inflation. The only thing we can know for sure is that there must be inflation.

Posted by Orrin Judd at July 15, 2005 7:23 PM
Comments

Well, the airlines are definitely getting crushed between high oil prices and an inability to raise fares.

Posted by: Michael Herdegen at July 15, 2005 8:23 PM

Michael, except for Southwest which reported 41% higher revenues for 2nd quarter due to its fuel purchasing strategy.

Ironically, Inflation became noticeable in the 1970s and early 1980s, until Reagan's tax cuts and deficit reduction packages were signed into law. Ford and Carter shepherded the rise in inflation and can share the honor.

Posted by: John J. Coupal at July 16, 2005 8:51 AM
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