Why worry about producer price inflation when workers wages are flat?

[papau]

So we forecast a 0.3 percent increase in February producer price index, and we get 0.4% (0.7 over last 2 months, and 0.9% over last 2 months for "core") - but why worry about the decline in the value of the dollar dropping 5 % in last year against the trade-weighted basket of currencies of U.S. trading partners making foreign made goods more expensive, as long as US wage increase are near zero and we are shipping jobs offshore. <snip>


http://quote.bloomberg.com/apps/news?pid=10000006&sid=aIYlVKygQ3mQ&refer=home


U.S. February Producer Prices Rise 0.4%; Core Rate Up 0.1%

March 22 (Bloomberg) -- <snip>The 0.4 percent increase in the measure of prices paid to factories, farmers and other producers followed a 0.3 percent rise in January, the Labor Department said today in Washington. The core rate, which excludes food and energy, rose 0.1 percent after a 0.8 percent increase.

Core prices rose 2.8 percent from February of last year, the biggest 12-month rise since November 1995, suggesting producers are having more success in passing on higher costs and underscoring forecasts Federal Reserve policy makers will raise interest rates later today to help contain inflation.

``Goods price inflation is still accelerating, but it's not as out of control as it looked in January,'' said Robert Mellman, an economist at J.P. Morgan Securities Inc. in New York, before the report. ``There is a lot of cost pressure, domestic demand is stronger and we have a weak dollar, and that makes it easier for companies to pass on price increases. These inflation pressures are a concern for the Fed.'' <snip>

Costs of intermediate goods, those used in earlier stages of production, rose 0.7 percent last month and were 8.4 percent higher than they were in February of last year. Excluding food and energy, intermediate prices rose 0.5 percent after rising 0.8 percent in January. <snip>

[papau]

1. economist at Manufacturers Alliance (trade group) actually said wages will

not increase in future (I assume because of all the outsourcing) so there is nothing to worry about!


"The inflation data to date have been showing what you would expect given an economic recovery, but nothing that I would consider to be disconcerting," said Cliff Waldman, an economist at Manufacturers Alliance, a trade group in Arlington, Virginia. "It's important to remember that labor costs hold the lion's share of total American business costs, and the data as a whole and labor costs going forward are fairly benign."

[ashmanonar]

2. wow...

:o...so they have to...pay for...LABOR? oh my god, it's like they're being punished for making stuff in the us! dreadful! astounding! horrid!

jesus fucking christ. you'd think these companies aren't actually american (well, most of them aren't anymore.)

so when america is a tyranny, with an underclass of untermenschen, what will they do then? will they kill us?

[papau]

3. I hope we can stop this..... I hope .... :-)

:-)

[LiberalEsto]

4. No, they'll dose us with more mercury

and turn us into worker Deltas (read "Brave New World")

[ashmanonar]

6. yea, stuff from brave new world and 1984 and other books i've read

keep popping to mind when i think of our current situation.

scary, i know.

[Robert Oak]

9. slave economy

that's the ultimate profit margin on manual labor.

so, "they" don't need to worry about inflation because "they"
can now depress US wages substantially..

while "we" have an overall dramatic decrease in the standard of living
and while "we" on fixed incomes cannot pay the rent or buy medicine.

Pretty damn amazing how people are treated as "cost" and the "person"
the article is written for is an entity called a corporation.

[oecher3]

10. :-)

[mhr]

5. But Papau, Have You Not Heard About All The New Robots To Replace

Workers.

A new company of cybertronic warriors was sent to Iraq recently.

If we can replace soldiers, is the American worker far behind?

[oscar111]

7. 5 billionaires, 5 billion robots: GOP utopia

who needs you?

[jmcon007]

11. will they have to have a new

Geneva Convention just for Robot prisoners of War?

[oecher3]

8. Who do producers think...

... will purchase their goods if they negatively cost-correct labor inputs and at the same time raise prices? Isn't that pushing your knife into your own back? Or are they under the impresssion they can turn us into an export nation where foreigners will buy "made in USA"? I have claimed before, I believe we are in an open competition (war?) with China on dumping prices, using the Chinese strategy of cheap currency and cheap labor taking in all the outsourcing one can (although the US right now is still outsourcing rather than taking in production!)