Posted on 02/16/2011 9:43:08 AM PST by FromLori
This ain't good:
The Producer Price Index for finished goods rose 0.8 percent in January, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This advance followed increases of 0.9 percent in December and 0.7 percent in November and marks the seventh straight rise in finished goods prices. At the earlier stages of processing, prices received by manufacturers of intermediate goods moved up 1.1 percent, and the crude goods index rose 3.3 percent. On an unadjusted basis, prices for finished goods advanced 3.6 percent for the 12 months ended January 2011. (See table A.)
Yuck. This isn't just bad, it's horrifying. Let's look at the table inside because it's there that you have to be paying attention to cost-push problems:
There's no possible good way to look at this.
At the finished goods level we have a three month run-rate of about 0.8% monthly. Annualized this is a 10% increase. That's freaking monstrous.
Worse however is in the intermediate goods; there we find a roughly 20% annualized inflation rate.
And in crude goods? Hold on to your hat: Annualized on an average basis over the last four months it's roughly sixty percent.
For the math wonks: ((1.047 + 1.013 + 1.065 + 1.033) / 4) ^ 12
Margin collapse? You better believe it.
Either that, massive destruction of the consumer's standard of living or both.
I've been hollering about this since August of last year. Folks, the data is not getting better.
It's getting much worse.
Hoo boy...
What if you're dyslexic?
OY! Ping!
For those of us that are not used to reading these charts, can someone put this is plain language?
And he "shows his work".
Forget the chart; read the text after the chart.
It means we have some big price increases coming.
When does this show up in the consumer price index ... if ever?
Having graduated from college during the lovely Carter economy, this looks waaaayyyy too familiar. Double digit unemployment coupled with double digit inflation. Wringing out inflation involved tight monetary policy, with its high interest rates. High interest rates are good for those with money to lend, but really tough on the real estate and automotive markets. Then there's the question of how to service the national debt at higher interest rates . . . very painful.
I am very angry with our political class, our media, and our leftist 'elites' for what they've helped perpetrate upon our nation (and the world).
However long it takes for crude goods to be come intermediate goods, then intermediate goods to become finished goods, and then finished goods to get put on the shelves.
Either that or “margin compression” drives the profits of the producers of those goods to zero.
You will see it at the check out before you see it in the CPI.
I’ve certainly seen the increases in food prices in recent months.
Can you say:
STOCK MARKET CRASH.
Market Ticker has been predicting companies margin compression and profit margin collapse, which will lead to a Stock Market Crash, by the end of 2011.
It might happen in 2012.
Can you say:
STOCK MARKET CRASH.
Market Ticker has been predicting companies margin compression and profit margin collapse, which will lead to a Stock Market Crash, by the end of 2011.
It might happen in 2012.
Yes, and the “portion sizes” have been going down!!!!!!!!!!
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