Wholesale Inflation Way Up

The high price of fuel is beginning to really hurt wholesale prices as the index shot up another 1.2% last month which pencils out to a rate of 9.8% over the last year:Today's report follows recent news that consumer prices are also rising faster than expected -- and faster than the Federal Reserve's generally accepted target rate of around 2 percent. Although wholesale inflation does not necessarily translate into higher consumer prices, it can be evidence of things to come. So far, however, the Fed has not reacted to those inflation reports by raising interest rates, out of concern that higher borrowing costs would further slow the economy. With oil prices in particular falling from recent record highs, there is hope that upcoming reports will show price increases slowing. At the same time, other government data brought more bad news for the housing industry. Housing starts in July fell an additional 11 percent compared to the month before, and housing permits -- a gauge of future...(Read Full Post)