Thursday, February 28, 2008

Prices Up, Inflation Too...............

Inflation, too, is hitting the headlines… Producer prices inflated at a breakneck rate of 1% in January, says the Labor Department this morning. Year over year, producer inflation is up 7.4% -- the worst rate of inflation since 1981. Core PPI rose 0.4%, also beating Wall Street estimates.
“None of this comes as any real shock,” says Kevin Kerr. “After all, we've all felt our wallets shrink a little more each week as gas and food prices take a bigger and bigger bite out of our incomes. Many ‘experts’ say that these high prices can't last -- I disagree.
“Commodities across the board are hitting all-time record prices. Everything from coffee to crude, gold to wheat is making new highs. In fact, wheat has been in such a record rally that the exchange had to officially expand the limits on the futures contract, and it's still trading limit up.
“Consumers are faced with starting to have to make tough choices and also foregoing certain things that in the past would not have been an issue. While this may begin to dampen demand for certain commodities, we're not seeing it yet.”

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