Why Is It Such A Surprise?

Don't these people shop? Or fill up their cars themselves? How clueless are these people? The price of everything has gone up. There are signs in supermarkets apolgizing for the price of fruits and vegetables, blaming the increases on the weather and on transportation.

Consumer Prices Rose Higher Than Expected in April - New York Times: "Most forecasters had anticipated that the Consumer Price Index would rise no more than 0.5 percent, so the news of the higher rise came as a surprise.

'The needle is moving in the direction of higher inflation,' Ken Mayland, the president of Clear View Economics, told The Associated Press. 'This is not good news and suggests that more companies are passing their higher costs to consumers.'

Um, duh! You didn't really think they would give up a little profit did you?

Excluding energy and food costs, which can vary widely from month to month, the core inflation rate increased 0.3 percent during the month, according to the report by the Bureau of Labor Statistics. This too was greater than the expectation of private economists, who had been anticipating an increase of no more than 0.2 percent.

Consumer prices have been rising at a rate of 5.1 percent so far this year, above the rate of 3.4 percent for all of 2005. The core rate rise of 3 percent so far this year is also above the 2.2 percent increase last year.

To try to fend off inflation, the Federal Reserve increased interest rates last week to 5 percent, the highest level in five years. Economists have said evidence of advancing prices could provoke further action by the agency, which functions as the nation's central bank.

Energy prices increased 3.9 percent in April, coming on top of a 1.3 percent gain in March. Both gasoline and fuel oil prices increased, but natural gas declined."

Of course it declined, people don't need to heat their homes, they need to cool them. Time to switch from gouging the consumer for natural gas and move to electricity. The regular people will just have to find better paying McJobs.

Oh well, maybe will I join the Border Patrol, I hear they are hiring. Then I will be in the "approved" zone. You know, either indepently wealthy (not!), working for the government, military, prison system, or Walmart. The only other option will be incarceration at one of the government run facilities. Nice future and one that we will all be forced to share.

By the way, check your credit card statements. It seems the companies have come up with a new trick. And it doesn't benefit the consumer.

Update: According to the Washington Post the day impact of the CPI forced the Nasdaq negative for the year, with the Dow headed downward by 200 points, undoing all of the gains from the past few weeks.

But prices of many other goods and services rose as well. The core-CPI, which excludes food and energy was up 0.3 percent, same as in March, reflecting higher prices for items such as air travel, used cars and electricity.

Stock prices fell sharply after the report fanned investors' concerns that businesses are passing more of their climbing costs to consumers and that the Federal Reserve will have to keep raising interest rates to prevent inflation from taking off.

"It's a real inflation scare in the market," said David Shulman, a visiting scholar at the UCLA Anderson Forecast. "The Fed may see a slowing economy coming from a weakness in housing construction, combined with rising inflation. It could smell like a stagflation. . . . Interest rates could be [headed] much higher than what was thought a few days ago."

From stagflation to inflation. Just what the little people needed.

Tags: inflation, consumer price index, CPI, gas prices, Federal Reserve, interest rates, credit cards, Dow,