Wednesday, May 14, 2008

Inflation Tame? Not in the Real World

The always interesting inflation numbers came out this morning. Continuing the trend, the numbers come in below expectations so the market can rally. Let's take a look at some of the numbers:

Food prices rose 0.9%
Medical prices rose 0.2%
Clothing rose 0.5%

Here's where it gets interesting. Transportation prices fell 0.7%. With airline fares and car prices falling. Didn't many major airlines just say they needed to raise fares across the board to keep up with fuel prices?

And the real beauty, energy prices were unchanged. Gasoline prices fell 2% and natural gas prices rose 4.8%. I'm not sure what planet they are on. Gas prices fell 2%?

Meanwhile, average weekly earnings for U.S. workers, adjusted for inflation fell 0.5% in April.

Barry Ritholtz covers inflation a little more in depth.

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