Is inflation on the rise?
*Financial Times, by James Politi, August 19, 2008:
"US wholesale prices see sharp spike
US wholesale prices rose twice as fast as expected last month as new
home construction plunged, government data showed on Tuesday, offering
little reason for optimism on the outlook for either inflation or the
ailing housing market.
The producer price index, which was forecast to jump by 0.6 per cent in
July, instead gained 1.2 per cent, disappointing economists looking for
signs of a quick easing in inflationary pressures. The data echoed the
release of the consumer price index last week, which also increased
twice as much as expected – by 0.8 per cent.
At the core level, which excludes volatile food and energy costs, the
jump in wholesale prices was even more surprising. The index increased
by 0.7 per cent, more than three times as much as the 0.2 per cent gain
predicted by economists.
At an annual level, the headline PPI was up 9.8 per cent, the highest
since 1981, while core PPI was up 3.5 per cent, the most since 1991.
The Federal Reserve is expected to keep interest rates on hold at 2 per
cent through the end of the year at least, but may be forced into
raising rates if high inflation persists."
*This information is solely a highlight of the opinion of a third-party publication and is incomplete. Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.
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