U.S. May Producer Prices Rise 0.8% (exceeds 0.6 inflation expectation)

[papau]

http://quote.bloomberg.com/apps/news?pid=10000103&sid=anIW5iIo7jLc&refer=news_index

U.S. May Producer Prices Rise 0.8%; Core Rate Rises 0.3%
June 17 (Bloomberg) -- U.S. producer prices rose 0.8 percent in May, the biggest increase in more than a year, boosted by surging energy and food costs, a government report showed. So- called core prices, which exclude food and energy, rose 0.3 percent.

The increase in the measure of what factories, farmers and other producers receive for their goods followed a 0.7 percent rise in April, the Labor Department said in Washington. The index last rose more in March 2003. The core measure had risen 0.2 percent in April. <snip>.

[leftyandproud]

1. nothing more could be expected

the fed is printing paper money like there's no tomorrow...inflate or die...the keynesian way.

[dusty64]

2. Are these the numbers

that were delayed due to "problems"?

[happynewyear]

11. yes they are

[WI_DEM]

3. on the front page of our right-leaning morning newspaper is

a story about "the cost of living" and how many families are feeling the pinch and "cutting back" this is the issue which will do more to defeat W than any.

[nodictators]

4. Bloomberg forgot to mention that 0.8% for one month gives...

... an annualized rate of about 10%!!!

And what's this crap about a "core rate" which excludes Food and Energy?

Are Food and Energy necessities? You bet they are.

So maybe frisbees and ping-pong balls plummeted in price. Will that offest the $4/gallon cost of milk for the children and the $2/gallon cost of gasoline for getting to work?

[Doctor Smith]

5. This is confusing.

Month after month, producer prices keep rising at fairly high levels, but consumer prices are rising only slowly. This should be putting the squeeze on producers, yet we are told how wonderful the manufacturing sector is doing.

It doesn't add up.

[Frodo]

8. The difference

is that this is the increase in the price producers pay for their materials. The price the consumer pays for finished goods is certainly impacted by raw materials costs, but remember that there are quite a few other factors that go into that as well.

The biggest is actually salaries of the producer's employees. Obvously those haven't been going anywhere (and fast). Other costs of production (PP&E, insurance, etc.) may not have been changing as much either.

So if raw material costs go up 1%, but they make up only 25% of production costs and other costs (particularly salaries) are stagnant... the consumer price for that good may only go up .25% for the month.

There's also a "pricing power" issue involved - as you stated. producers may have to accept smaller profits on a per unit basis. But more units are being sold.

End results right now are that some of these companies are making record profits. I'm not feeling too bad for the average company whose profits are up 40% but whose payroll has yet to change (holding raises to 0-2%).

[yellowcanine]

6. Fed will raise interest rates .5 points in July and probably another .25

in August. This will slow the recovery but it is a must. Greenspan is more concerned about his legacy as an inflation fighter than whether George Bush wins or not.

[Born Free]

7. Greenspan lost his credibitly

Many no longer have much respect for Greenspan, as he sold out all his core beliefs to support the bush teams effort to create huge deficits

[happynewyear]

12. Greenspeak's credibility now at -zero

I swear Greenspeak has gotta go soon. He's finishing off what is left of the working class quickly.

Every time his mouth opens, the stock market shudders. And the next day its a new form of doublespeak and it means the opposite of what it meant the day before.

This man is the equivalent of a Dr. Jeckyl/Mr. Hyde. He's trying to hang on to the purse strings tightly now. However, the market isn't responding. This is a BIG problem. So supposedly Greenspan raises rates? How good is that going to be for corporate greed? Answer: NOT!

The whole thing is a diabolical and unpredictable chaotic mess. Nothing will change this anytime soon. America has dug themselves into a very deep dark pit and its now beginning to reveal the tip of it evil routes.

:nuke:

[Doctor Smith]

9. They had better hurry, things are starting to get out of hand.

Some supplies I buy have doubled in price since last year, and shipping prices have nearly doubled, also.

[AndyTiedye]

10. and about THREE POINTS on Nov 3rd.

They've been holding rates down bigtime to help re-select the Shrub.