Thursday, July 17, 2008

Inflation

Prices are going up everywhere, including Miami, as inflation hits the highest rate since 1991.

The Labor Department said Wednesday that the national inflation rate hit 5 percent in June, the highest annual rate since 1991. South Florida’s rate was 5.8 percent, tying Seattle for the highest of 10 metropolitan areas tracked by the government for the month.

Meanwhile, wages went up only 2.8 percent, which means the average family was losing purchasing power.

From May to June alone, prices were up 1.1 percent, the second-highest monthly increase since 1982, after normal seasonal fluctuations are taken into account. The numbers are from the federal Consumer Price Index, a monthly measure of the cost of various goods and services.

Gas prices led the increase, rising 33 percent nationally since this time last year.

Food prices rose 5.2 percent, led by bread and cereals (up 10.4 percent) and fats and oils (up 14.3 percent), according to the U.S. Bureau of Labor Statistics.

What was down? Not much. Personal computers cost about 12 percent less. Women’s and girls’ clothing were down 3.3 percent. New cars were down 1 percent, but used cars were up 0.7 percent, with small, fuel-efficient used cars fetching premium prices.

The public is growing increasingly unhappy with the state of the economy.

Meanwhile, back at the ranch:

“I think the system is basically sound, I truly do,” Bush said. “I understand there’s a lot of nervousness. The economy is growing. Productivity is high. Trade’s up. People are working – it’s not as good as we’d like. And to the extent that we’ll find weakness, we’ll move.”

Bush defended his insistence that the U.S. economy was not in a recession, even though many economists believe it is.

He said the traditional definition of a recession – two quarters in a row of negative growth – had not been met.

“I’m not an economist, but I do believe we’re growing,” he said. “I’m an optimist. I believe there’s a lot of positive things for the economy.”

Maybe it’s time to get a new definition of recession, and maybe we should take up a collection to buy Mr. Bush a clue…if you can spare a dime.