And now comes the side effect of duping the market about why oh why interest rates need to stay low to "avert the danger of deflation". Let's all hope they have limited money supply growth adequately in time. And if not... got inflation?
Big gain in U.S. wholesale prices
Fri 14 November, 2003 13:56
WASHINGTON (Reuters) - U.S. wholesale prices unexpectedly posted their biggest gain in seven months in October as food prices rose sharply and car prices spiked with the introduction of new models, according to a government report.
The Producer Price Index, which measures prices paid to farms, factories and refineries, shot up 0.8 percent last month, the Labour Department said on Friday.
A 2.2 percent increase in food prices, the largest since January 1984, accounted for much of the gain. Energy prices slipped 0.1 percent.
The so-called core rate, which strips out volatile food and energy prices, increased a sharp 0.5 percent.
The department said the core PPI was up just 0.2 percent excluding sharply higher vehicle prices. Car prices rose 1.6 percent and prices for small trucks and SUVs soared 3.4 percent, their biggest jump since October 1985.
The report was at odds with expectations on Wall Street, where economists had expected overall producer prices to rise just 0.2 percent with the core rate up 0.1 percent. |
