Posted on 07/14/2011 6:10:26 AM PDT by Free Vulcan
WASHINGTON (MarketWatch) — U.S. wholesale prices eased in June as the cost of energy posted the biggest monthly drop in two years, the government reported Thursday.
The Labor Department said its producer price index fell 0.4% last month, marking the first decrease in one year. The decline matched the forecast of economists surveyed by MarketWatch.
Energy costs sank 2.8%, mostly because of falling gasoline prices. Food prices rose 0.6%, however.
(Excerpt) Read more at marketwatch.com ...
Big deal. Gas was a very temporary, politically engineered decline. Gas and oil are right back up there and will show up soon officially.
Did they forget that the price of fuel went up 100%?
Gas is well on his way back up in these parts.
I'd have to agree. The big problem today isn't OPEC throttling supplies - it's developing countries totaling about 3b people rapidly adopting the automobile as a means of transportation. The mere fact that the Chinese automobile market is now larger (in unit, but not dollar, terms) than the US automobile market - starting essentially from a zero base in 1980 - means high % increases in oil consumption. The numbers bear this out - US oil consumption in 1980 was 17,056m barrels per day vs a number of 18,810m in 2009, for an increase of 10% over ~ 30 years. In that same period, Chinese oil consumption went from 1,765m barrels per day to 8,324m barrels per day, for an increase of 371%. India went from 643m bpd to 3,110 bpd, an increase of 383%.
In that interval, large oil exploration firms have grown increasingly cautious about placing large bets because of the widespread tendency of host territories (Russia, China, Iraq) to renegotiate deals once oil is discovered. The bottom line is that even as host countries make oil exploration much more financially risky for the majors, thereby throttling new supply, even as existing fields are depleted, demand is increasing in leaps and bounds. Bottom line is that higher oil prices are here to stay.
LLS
And yet gas is up 15 cents since last week here, and still around $3.75/gallon. More hopey-changey.
Here gas prices are up. I had just filled up at the higher price and was pulling out of the station when I heard on the Radio News that prices were down by 40 cents. A perfect example of our disease. Irrational Media Exuberance over Obama and the RATS. Bagdad Bob had nothing on them.
Prices Down?
Prices might have dropped on designer gowns, caviar, mom jeans, organic arugula and silver Prada sneakers, but almost everything we commoners buy has increased in price every week.
Of course we did have a small (twenty cent) temporary drop in gasoline after it went up 250% since the Obama Coronation. But it’s on the way back up now.
Don’t forget Belgian endive. (/Dukakis voice)
This is likely to be true. It does not help the administration’s argument that a recovery is underway. Deflation is not an indicator of recovery quite the opposite.
But a one month decrease on top of several months/yrs of increases doesn’t mean we are truly in deflation. Let me know when gas hits two bucks a gallon.
These declines are illusory, but that doesn't stop the MSM from pimping any semblance of good economic news in an increasingly desperate effort to benefit the 0ne.
Gas prices have already rebounded up in California.
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