Tuesday, April 12, 2011

Price Inflation Is Baaack: Import Prices Soar

In March, prices for all imports jumped by more than expected by Keynesians. Import prices climbed 2.7%, just in the month of March. Compared to a year ago, prices have surged 9.7%. It should be noted that the annualized rate of the March increase is 32.4%,

Oil, not surprisingly lead the gains, as oil is used in both the capital goods sector and consumer sector. Thus, there is fierce bidding for it, whenever there is extra money floating around anywhere in the economy.

But oil wasn't alone, over the last 12 months through March 2011, the import price of foodstuffs increased 20%, copper soared 31% and aluminum was up 14%.

Also of note, prices of imported manufactured goods are starting to climb. Over the last 12 months ,prices of manufactured imports are up 5.3%. During the financial crisis, these prices were falling by as much as 7.9%.

This will surprise Paul Krugman, Ben Bernanke and other Keynesians, but price inflation is back and climbing.

On Tuesday, the March survey of small businesses done by the National Federation of Independent Business showed an increasing number of small firms are increasing their selling prices.

“Inflation is back on Main Street,” the NFIB report said.

1 comment:

  1. "Paul Krugman on Jobs: New Grads Will Bear Scars of Financial Crisis" (video): http://f4a.tv/hr8Ebq (@nytimeskrugman via @92Y)