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AP Bemoans Decline In Wholesale Prices

From the perpetually distraught Associated Press:

October wholesale prices plunge record 2.8 percent

By MARTIN CRUTSINGER

WASHINGTON – Wholesale prices plunged a record amount in October as energy prices fell by the largest amount in 22 years.

The Labor Department reported Tuesday that wholesale prices dropped by 2.8 percent in October, the biggest one-month decline on records that go back more than 60 years. The previous record holder was a 1.6 percent fall in October 2001, the month after the terrorist attacks…

The 2.8 percent overall decrease marked the third straight month that wholesale prices have fallen.

Many economists believe the economy has fallen into a recession that could be the worst downturn in more than two decades. The expectation is falling inflation pressures will give the Federal Reserve room to cut interest rates further to combat the downturn…

The PPI report showed that energy prices dropped by 12.8 percent in October, the biggest one-month fall since a 14 percent decline in July 1986.

All types of energy showed big declines with gasoline falling by a record 24.9 percent, surpassing the old mark of a 22.1 percent drop in March 1986.

Home heating oil prices were down 9.6 percent, natural gas intended for home uses fell by 5.9 percent, and liquefied petroleum gas dropped by 27.6 percent, the biggest decline in more than three decades…

You see, when prices go up — that is bad.

When prices go down — that is also bad.

At least until we finally have a Democrat President again.

This article was posted by Steve on Tuesday, November 18th, 2008. Comments are currently closed.

4 Responses to “AP Bemoans Decline In Wholesale Prices”

  1. proreason says:

    Reuters is just tilling the soil for Obamy’s ascendency, after which the econonomy will sprout miraculously……no matter what the data indicates.

  2. EvilConservo says:

    Wait ’til gas prices skyrocket in January.

  3. GuppyNblue says:

    These falling gas prices are a nice respite for me. Obama says he wants to build the economy from the bottom up but it looks like it’s being destroyed from the top down. Apparently some of the giants are starting to cry about it.

    Warren Buffet (who lately suffers from a bleeding heart) has lost $16 billion dollars since he tried his own stimulus investments. His Berkshire Hathaway has lost 30% share value and his $5 billion Goldman Sachs investment has cost him $2 billion so far. How can such an intelligent investor not get that the market is being raped in Congress? And why is he rallying it on by urging bailout money?
    All I know is I’m taking a long drive this weekend to feed the fish.

  4. WickedWolf says:

    Just beware the so-called liquidity trap…

    http://en.wikipedia.org/wiki/Deflation
    http://en.wikipedia.org/wiki/Liquidity_trap

    I’ve heard noises that the Fed is thinking about lowering interest rates 1/2 a point…again. The availability of money isn’t the problem; it’s fears of the economy getting worse. Lowering rates again only encourages this fear, devalues the dollar further, and takes away the only brakes the Fed has. Once the interest rates (now already lower than inflation was) hit zero, the Fed is out of monetary policy options. If deflation then continues because of withheld demand and withheld credit to the point that it is no longer profitable to produce things, we will be in big trouble.

    Personally, I hope that the economic theory is wrong and this is just a (long overdue) natural correction that will finally put the equilibrim price where the market dictates (lower), as opposed to where the government thinks it should be (high). http://www.dailyreckoning.com.au/natural-market-correction/2008/09/22/


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