Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: yard_man who wrote (3313)	4/1/2004 11:17:03 AM
From: mishedlo	Read Replies (1) of 116555

Thoughts on PPI from Roger on the FOOL Add up the inflation in crude goods over the last 12 months and you get 12.8%, double the last 6 months and you get 26.8%. Doing the same for intermediate goods you only get 2.7% and 4.4%. Doing the same for the finished goods you only get 2.2% and 3.2%. What really isn't rising are labor costs, and that is probably a large part of why intermediate and finished numbers haven't gone up much as the crude goods numbers. When inflation ran away in the 70s, labor costs continually rose as well. People on fixed incomes were hurt, but workers did OK and people with large fixed mortgages did great. (I vaguely remember commentators back then blaming inflation on workers and unions because they kept demanding higher salaries.) Inflation hurts workers more, now, since wages aren't keeping up.

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