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2.7%  Q1 GDP    4.57%  avg. 30-year mortgage     9.5%  Unemployment

Wholesale prices take surprise jump, stoking inflation fears

Wholesale prices rose more than expected in November, stoking inflation fears.

The producer price index rose 1.8 percent in November, compared with October, and was up 0.5 percent if you remove volatile food and fuel prices.

Wholesale prices were up 2.4 percent compared with November 2008. Removing food and fuel, prices were up 1.2 percent.

The November report on consumer prices -- the inflation that Americans feel most acutely -- is due out Wednesday and usually follows the wholesale prices.

Forecasters expected wholesale prices to rise 0.8 percent in November, following a 0.3 percent increase in October.

If you strip out volatile food and fuel costs, forecasters expected wholesale prices to rise 0.2 percent in November, after actually dropping 0.6 percent in October.

These numbers are a surprise and will give ammunition to those who believe the Federal Reserve should raise its interest rates to fight off inflation. The Fed begins a two-day meeting today but is nevertheless expected to keep interest rates at record lows when it announces its policy decision on Wednesday afternoon.

-- Frank Ahrens
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By Frank Ahrens  |  December 15, 2009; 8:42 AM ET
Categories:  The Ticker  | Tags: Federal Reserve, inflation, wholesale prices  
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Next: Surprise inflation data pushes stocks down at opening


Is anything NOT A SURPRISE to this Administration?

Kind of makes you wonder who is doing their job?

Posted by: WeThePeopleofVirginia | December 15, 2009 9:06 AM | Report abuse

Coincidence? OPM reports that based on the statistics "supplied" to them there will be no COLA increase; then, a few days later the real numbers show up and there was an actual increase but it's too late for OPM to correct it's mistake.

Posted by: wmboyd | December 15, 2009 9:07 AM | Report abuse

I do our grocery shopping and there's no doubt that prices are "UP". I"m a retired 80+ years old. My savings for living are almost nothing! It's time to rescue common, financially responsible Citizens. We can spend to help the Economy and ourselves. BARRON'S recently had an article to call for a Federal Resereve raise in interest rates. Now is the start of the time to help responsible Citizens help themselves and the Nation. Quickly!!

Posted by: WJJAWEST | December 15, 2009 9:14 AM | Report abuse

The inflation numbers produced by the U.S. government are cooked. The CPI is a hoax. The COLA is a hoax. The PPI is a hoax. These phony numbers are used to reduce government spending and it is another political "smoke and mirrors" trick devised by Alan Greenspan.

If we reported the true rate of inflation and managed money supply, interest rates, and government spending accordingly, we would not have the pricing (health care, higher education) and investment bubbles (stocks, housing, oil, gold, et al) that are destroying our nation.

Posted by: hz9604 | December 15, 2009 9:22 AM | Report abuse

See the following link for info. I had to change the link because the WaPo removes links.

captiveamerican dot kom


Posted by: hz9604 | December 15, 2009 9:24 AM | Report abuse

Obama Math: government employees get a 2% pay raise, but there is no cost of living increase for Social Security recipients. I guess the old people in this country are supposed to unionize, hire thug union bosses, and then Obama and the liberals will get on their knees for them.

The democrats have abandoned the working people of this country. They cater to the DMV worker, the postal worker who steals your mail, and the overpaid college professors getting $33 million stimulus bonus for retiring.

This is the worst I have ever seen this country.

Posted by: Cornell1984 | December 15, 2009 9:46 AM | Report abuse

it IS possible to have

high inflation

and high unemployment at the same time

the "eight percent unemployment" team obama can do it

when you have team obama printing worthless money at will

at the same time team obama attacks capitalism

the flight to the euro has begun

many completely usa domestic wholesale transations are now denominated in euros

Posted by: ProCounsel | December 15, 2009 9:47 AM | Report abuse obama

learn from holiday inn

the best surprise

is NO surprise

team obama--mr. magoo economics and the eight percent solution

Posted by: ProCounsel | December 15, 2009 9:48 AM | Report abuse

So let us review. According to whomever there is are no price increases on gas, oil, electricity, food, clothing and other costs. And yet we are paying more. But there is still no inflation? OK so now that I am drinking both booze and the kool-aid where did I miss something or was I asleep? But then under both BUsh Jr and now the chosen one the CPI does not change until after they actually do out and then whammo they do gosh what a magic show. In any case with the actual jobless rate at over 17% and going wayyyyyyyyy up after XMAS, the dollar becoming worthless and a huge tax increase in January or Feb due to pay for all of this how does the government expect anyone to pay for this stuff?

Posted by: KBlit | December 15, 2009 9:49 AM | Report abuse

When you print money backed by nothing, inflation is inevitable.

Is that so hard to understand?

Liberals are bankrupting America while The People helplessly watch in horror.

Free again in 2010.

Posted by: clandestinetomcat | December 15, 2009 9:56 AM | Report abuse

My concern is that Beranke and the Fed will duplicate their 2003-2005 "deer in the headlights" actions, and wait far too long before tightening up the money supply. As it is, the Fed has helped create inflation in the developing world. It is a matter of time before all of the rapid expansion creates killer inflation here. And with Congress set to have more influence, things will get worse.

Posted by: hmgcpa52 | December 15, 2009 10:18 AM | Report abuse

The Federal Reserve printed 200% more money during the last two years, increasing the money supply from $800 billion to $2.1 trillion. This is only what they are showing us on their book. The off-balance sheet part is in the trillions. The government is trying to cover up inflation, which is far higher than the published number. If you don't believe it, just look at the prices of commodities needed to produce everything. Food, energy and minerals have all gone up 50% at least. The Federal Reserve is trying to inflate the banks' debt away at the expense of ordinary Americans.

Posted by: jiaming | December 15, 2009 10:28 AM | Report abuse

Excuse me, but exactly where is the surprise, I am a diabled veteran on SSD and my costs for cable TV have gone up, my electric bills have risen, the cost of everything around us is going up, even federal employees were given a small wage increase this year, everyone but the elederly and disabled that depend on government programs for us, SS, SSD, VA compensation and thing that depends on the CPI as a basis for a COLA, since they claim there was no inflation from Sep 08 - Sep 09 (remember the huge gas prices in 07-08 that led to that huge 5.8% COLA last year) we are left with no raise this year, despite regular businesses raising their prices the Post Office and stamps to gas and water, etc. I imagine next year will be another boon year for COLA, in the meantime we just all need to tighten our belts bu cutting someof the things we think were necessities before, like cut off HBO that is a 12 dollar increase in your income, stop your hard print newspaper and read it online or at the library another 15 dollar a month (raise) we just have to figure out what we can do without to raise our incomes, we know state and federal taxes are not going to be cut.

Posted by: mikey30919 | December 15, 2009 11:03 AM | Report abuse

The Obama Czar... you know the guy who says the recession is over and than the next day someone's in his department says it isn't. The lunatics the inmates these are who are managing the country. We are told by the media they are Obama's miricle workers. Well if all this is a miricle what are we going to see if it fails? I have two question for Obama's so called economic czar. How will the economy grow while costs go up to the manufacture when there is no demand or money to buy anything and at the same time Obama keeps building the largest liability our economy has the Government for his Union thug buddies? What is the purpose to do this unless it is to intentionally destroy the country? I'll answer the second question the unions own Obama and he is paying them off at the expense of the rest of the country and getting his desired goal at the same time by making us dependant on him. These Marxists need to be extradited or prosecuted for criminal behavior.

Posted by: tri5 | December 15, 2009 11:10 AM | Report abuse

Altogether now, sing along with the Obama team: 'Pick away on the old banjo, keep that guitar strummin', put more water in the soup, better times are a comin'!

Posted by: mpwynn | December 15, 2009 11:13 AM | Report abuse

Who sets wholesale prices?
A few speculators.

Posted by: angie12106 | December 15, 2009 11:27 AM | Report abuse

Again, read the link below and you will understand how the Fed and the govt. have corrupted inflation calculation.

The WaPo deletes http links so I had to "encrypt" the link. The actual link should be evident.

captiveamerican dot kom


Posted by: hz9604 | December 15, 2009 11:34 AM | Report abuse

How about something approaching a more complete economic anaylsis...


Food prices generally rise in colder months and during the holiday season. The fluctuation is within a predictable seasonal range.

Fuel prices are subject to manipulations by large industry producers and hedge funds, are not expected to be sustained at the few points higher levels in the latest report; nor are they understood to be trending up.

With 10-20 percent unemployment in many regions, factory orders and construction down, there is insufficient upward pressure on prices to anticipate significant inflation in the near term.

Posted by: yerit | December 15, 2009 11:47 AM | Report abuse

What a surprise. Unemployment at 10% and Obama has printed money and spent money he does not have. The money has gone to Wall Street, the banks and the war. Now the unemployed and those on fixed income will face inflation like we last saw under Jimmy Carter. Thank you President Obama.

Posted by: gvelanis | December 15, 2009 12:05 PM | Report abuse

I can't understand all the union bashing. I don't care what organization you're in someone at the top will be unethical or crooked, even nonunion shops. Self employed are not exempt. You say the gov. favors unions? The auto had their wages cut in half by this favoritism! They allowed our products to be moved overseas because of regulations and they don't impose tax % tariff like imported goods receive. Cry and complain all you want, the price of automobiles haven't gone down since the gov put auto mfg. in their place but the unemployment rolls have soared and remember all those tax the union members paid? You lucky people get to pay them now along with health care and unemployment. Yes things are much better now, arent they?

Posted by: terry7170 | December 15, 2009 12:44 PM | Report abuse

The bottom line:
Can you afford to buy enough healthy food?
Can you afford to pay for your home or rent?
Do you have enough clothing to cover yourself (and stay warm if in a cold climate)?
Can you afford enough fuel for minimum human needs?
Can you afford your transportation?
Can you afford to see a doctor, dentist or eye doctor when you need to?

If you can still do those things reliably, you are wealthy enough and needn't worry!!!
You will survive quite comfortably.

However, if food costs jeopardize any of those others, if any one of those costs jeopardizes the others -- worry. You are teetering on the edge of poverty, vulnerable to preventable disease, death, and disability, freezing to death, and unable to travel to work except by hitchhiking or stowing away. Once poor, your chance of landing in prison skyrocket since you cannot survive by legal means and will have to cheat somehow.

Starve in America? Are food prices naturally volatile or are they manipulated?

AP news:
"With Monsanto's patented genes being inserted into roughly 95 percent of all soybeans and 80 percent of all corn grown in the U.S....Declining competition in the seed business could lead to price hikes that ripple out to every family's dinner table. That's because the corn flakes you had for breakfast, soda you drank at lunch and beef stew you ate for dinner likely were produced from crops grown with Monsanto's patented genes."

Posted by: KentL1 | December 15, 2009 1:15 PM | Report abuse

Inflation allows the greedy to pad the pocket a little more. This process is hammered into place in congress by the lobbyist. I believe nobody is truly in charge, because everyone is looking out for self. There is a false sense of patroitism, America means a comfortable chair by the fireside for the wealthy and the poor not the races is the joke at parties. If anyone desires to cry they should do so rather than risk insanity because your health coverage only covers 45% of the tab. First there was this announcement the recession was over then unannounced it's still going on, if the truth is to be told this country is out of out of contol because of fine print, rules, red tape, dead lines... there is too little connection with normal people and their struggle. It's like the State Dinner there were no average people on the guest list only the famous. We the people are the people that runs the country Conngress/the government are merely servants in whom are definitely not doing their jobs.

Posted by: alwaysAlabama | December 15, 2009 2:46 PM | Report abuse

massive unemployment

40 million on food stamps

now inflation

obozo the jokerclown achieves a hat trick

all you fools who voted for him deserve to be unemployed and have their money worth less. How is that negative hope and change working for democrats.

Hopefully the government health care communist giveaway is history too.

Posted by: charlietuna6661 | December 15, 2009 3:38 PM | Report abuse

Helicopter Ben policies in work...


Posted by: tl1970 | December 15, 2009 3:40 PM | Report abuse

what's the excuse now to not give a SSA COLA increase for those on disability and retired!!!!

Posted by: coqui44 | December 15, 2009 4:51 PM | Report abuse

Bernanke and the Fed, in their seeming never ending subservience to Wall Street in trying to boost the stock market, will probably wait until too late to check the inevitable return of inflation.

Posted by: Aprogressiveindependent | December 15, 2009 8:28 PM | Report abuse

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