Thursday, February 19, 2009

Wholesale Inflation Takes Biggest Jump in 6 Months

Inflation at the wholesale level surged in January. The Labor Department said Thursday that wholesale prices increased by 0.8 percent last month, the biggest gain since last July.

The acceleration was led by a 3.7 percent surge in energy prices with gasoline prices jumping by 15 percent, the biggest gain in 14 months.

Even outside the food and energy sectors, wholesale prices showed a strong climb, rising by 0.4 percent.

There are very strong crosscurrents in the economy right now. Some areas of the economy are still working through the Bernanke money slowdown of this summer. This is where the negative unemployment numbers come in--not completely surprising numbers given that unemployment is a lagging indicator.

This spike in inflation is a signal that some of the money printing that Bernanke is doing is starting to have a price inflation impact.

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