US Inflation Index ‘Missing’, but Alternates Show Giant Jumps

PRESS RELEASE Citizens for Corporate Accountability

-Official US PPI inflation index said missing due to ‘aging computers’
-Alternate indexes show large jumps in inflation--but US Treasury Secretary unaware
-Some US companies laying off due to jumps in inflation

(SEATTLE) March 8 - The US Bureau which reports an important US inflation index has postponed indefinitely releasing the figures. The US Producer Price Index (PPI) has not been released for January, and will not be for February either.

The missing PPI can show inflation earlier than the CPI, because it measures pressure at manufacturers, instead of when inflation finally shows up at the consumer level.

According to a report, there are software and computer problems that are delaying the release for an ‘unheard of’ amount of time. However, other departments in the same Bureau haven’t had problems reporting indexes, such as the Consumer Price Index (CPI). (1)

The loss of the PPI data comes at an unfortunate time. In testimony, Alan Greenspan recently suggested that the type of inflation measured by the PPI was only temporarily suppressed due to ‘hedging’ activities. Moreover, measures similar to the missing PPI, which also measure inflation at the production level, have shown a marked rise lately. For example, the Journal of Commerce index shows an inflation rate of over 40 percent. (2) Likewise, a second index, the “ISM prices paid component” showed a jump in inflation which hasn’t been seen since immediately before recent bond and stock market crashes.

The disappearance of the PPI figures also comes after a December report by Citizens for Corporate Accountability, which noted “juggling” of math related to energy prices, that resulted in a lower December PPI.

The absence of the PPI already presents problems. Disturbingly, a number of US companies have recently announced earnings shortfalls or job layoffs due to skyrocketing US inflation, which might otherwise have been noticed before hand. Apparently unaware of the situation--and as recently as this week--US Treasury Secretary John Snow stated inflation wasn’t a problem. Mr. Snow was also quoted last year as saying the US economy would generated a large number of jobs as a result of the Bush economic program, which never materialized. (3)

(1) See Missing Reports. (2) See Alternate to PPI up 40pct. (3) (Bloomberg 03/09/04) "Snow yesterday said tame U.S. inflation"

[Skip Intro]

1. Everything about this misadmin. is a fraud

The 2000 selection, 9*11, the Iraq invasion, the terror alerts, the "Christian" values, the economy - all of it. A total fruad.


This nation is in a shambles, and gwmoron and his greedy oil pigs have put us here.

[indepat]

2. "Skyrocketing US inflation" should be no surprise in view of the dollar's

precipitous fall against other major currencies that stem largely from highly irresponsible fiscal policies and ludicrous monetary policies: the public will likely notice this sad fact only in about everything they buy, but not in official government statistics. A massive fraud has been/is being perpetrated upon the American public, but sadly polls indicate almost one-half clamor for "four more years."

[On the Road]

3. Wow -- Interesting

Link to the Industrial Price index cited as a "PPI alternative":

http://www.joc.com/data/pricesindexes.shtml

Industrial prices are up 41.8% percent in the last year, especially in material prices:

Advances: Aluminum, zinc, lead, tin, nickel
Declines: Cotton, hides, crude oil

So far, most of these increases have not been passed on to the consumer, but have resulted in lower corporate profits. Maybe that's why no one's hiring.

The oil crises of the 70's produced inflation and low growth.
This appears to be a milder but more broadly-based supply shock, and is likely to have the same effect.

This seems like an awfully serious trend to be so obscure. You would think it would be all over the business news. Am I missing something about the index?

On Edit: I couldn't be sure if a 1% change in the INDEX means a 1% change in PRICES -- I'm assuming it does, but you never know. I did find this nugget:

The JOC-ECRI IPI is designed to yield a cyclical leading indicator of the inflation cycle: Cyclical turns in raw material price inflation, as measured by the growth rate of the JOC-ECRI IPI, anticipate cyclical turns in consumer inflation.

4. Some people are thinking the government is hiding the inflation data

That's because outside reports of big price jumps started in January. Apparently, many suppliers hedged until January. And Greenspan said this too.

So to some, the fact that the PPI disappeared in January is too much of a coincidence.

There are reports of steel prices jumping by half! Housing market is causing some of this--stealing away from other industries.

A one percent jump in prices is the same as a one percent jump in the index, as far as I know.

Employers are reacting to the price jumps by outsourcing overseas for cheaper labor. So the low interest rates are having a reverse effect. This is also according to one economist--it isn't just my take on things.