hugolp
11-17-2010, 04:13 AM
http://www.economicpolicyjournal.com/2010/11/finished-goods-prices-up-43-over-last.html
The Richard "I Am Not a Crook" Nixon inspired creation, "core inflation" number, that eliminates food and energy costs from inflation calculations, fell 0.6 percent for the month of October, according to the BLS—the biggest drop since July 2006. The news media is blasting out the number far and wide to anyone who justs reads headlines.
Meanwhile back in the real world, the Producer Price Index for Finished Goods increased 0.4 percent in October, seasonally adjusted. This advance followed a 0.4 percent rise in both September and August. At the earlier stages of processing, prices received by manufacturers of intermediate goods moved up 1.2 percent in October, and the crude goods index increased 4.3 percent. On an unadjusted basis, prices for finished goods advanced 4.3 percent for the 12 months ended October 2010.
In October, the increase in the index for finished goods can be traced to prices for finished energy goods, which moved up 3.7 percent. Over ninety percent of the October rise in energy prices can be attributed to the index for gasoline, which moved up 9.8 percent.
Looking down the road, a huge spike in food prices is headed down the highway. The index for crude foodstuffs and feedstuffs increased 4.2 percent in October. For the 3 months ended in October, prices for crude foodstuffs and feedstuffs climbed 13.3%.
In a further manipulation, hiding climbing prices, Michael Berger emails me to point out that new car prices dropped 3 percent in October, according to the BLS. It was the biggest decline since July 2006. Prices of light trucks decreased 4.3 percent, the most since October 2006. But get a load of this:
Today's report included the Labor Department's valuation of quality changes in 2011 model vehicles. This means the vehicle declines are totally bogus. Prices didn't go down anywhere except on a statisticians desk at the BLS.
The decline in vehicle prices for October, according to the BLS, was completely a determination by the BLS that new vehicles were outfitted with better equipment or more options, while manufacturers kept price adjustments to a minimum. In other words, vehicle prices didn't decline. In other words, this is the month the BLS does hocus pocus "quality change adjustments".
Take out the cost of food and gasoline, play hocus pocus with auto prices (that really aren't down) and viola, inflation is deflation.
The Richard "I Am Not a Crook" Nixon inspired creation, "core inflation" number, that eliminates food and energy costs from inflation calculations, fell 0.6 percent for the month of October, according to the BLS—the biggest drop since July 2006. The news media is blasting out the number far and wide to anyone who justs reads headlines.
Meanwhile back in the real world, the Producer Price Index for Finished Goods increased 0.4 percent in October, seasonally adjusted. This advance followed a 0.4 percent rise in both September and August. At the earlier stages of processing, prices received by manufacturers of intermediate goods moved up 1.2 percent in October, and the crude goods index increased 4.3 percent. On an unadjusted basis, prices for finished goods advanced 4.3 percent for the 12 months ended October 2010.
In October, the increase in the index for finished goods can be traced to prices for finished energy goods, which moved up 3.7 percent. Over ninety percent of the October rise in energy prices can be attributed to the index for gasoline, which moved up 9.8 percent.
Looking down the road, a huge spike in food prices is headed down the highway. The index for crude foodstuffs and feedstuffs increased 4.2 percent in October. For the 3 months ended in October, prices for crude foodstuffs and feedstuffs climbed 13.3%.
In a further manipulation, hiding climbing prices, Michael Berger emails me to point out that new car prices dropped 3 percent in October, according to the BLS. It was the biggest decline since July 2006. Prices of light trucks decreased 4.3 percent, the most since October 2006. But get a load of this:
Today's report included the Labor Department's valuation of quality changes in 2011 model vehicles. This means the vehicle declines are totally bogus. Prices didn't go down anywhere except on a statisticians desk at the BLS.
The decline in vehicle prices for October, according to the BLS, was completely a determination by the BLS that new vehicles were outfitted with better equipment or more options, while manufacturers kept price adjustments to a minimum. In other words, vehicle prices didn't decline. In other words, this is the month the BLS does hocus pocus "quality change adjustments".
Take out the cost of food and gasoline, play hocus pocus with auto prices (that really aren't down) and viola, inflation is deflation.