Prices spike 1.9%

first_img Analysts did say they were concerned about government predictions that natural gas to heat homes will cost 48 percent more this winter and home fuel oil will be 32 percent higher, pinching consumers’ wallets at a time when they are already paying record prices for gasoline. “Natural gas is definitely a problem. If we have a mild to normal winter, we are OK. But if we have a colder winter than normal, we just don’t have enough natural gas,” said David Wyss, chief economist at Standard & Poor’s in New York. 160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! Of 30 nonfood consumer goods tracked in the wholesale price report, 20 posted price increases and only two – soaps and toys – showed price declines, a marked turnaround from earlier in the year when most categories were showing declines. Among the big price increases were 1.1 percent for women’s apparel, 0.9 percent for passenger cars and 1 percent for heavy trucks, a gain that analysts said may be related to increased demand for vehicles to help in the Gulf Coast cleanup. “Slowly, but inexorably, inflationary pressures are building across the economy,” said Joel Naroff, chief economist at Naroff Economic Advisors, a private consulting firm. The worry is that a sharp jump in energy prices will begin to put pressure on products outside of energy and cause the underlying rate of inflation to start rising. That could prompt the Federal Reserve to accelerate its interest rate increases in an effort to slow the economy as a way of keeping inflation from getting out of hand. However, if tight global supplies keep energy prices at elevated levels, the inflation pressures might intensify even as the economy is slowing, pushing the country into “stagflation” – stagnant growth and rising inflation – something not experienced in America since the oil shocks of the 1970s and early 1980s. WASHINGTON – Wholesale inflation jumped by the largest amount in 15 years in September and there are worrisome signs that soaring energy prices from the hurricanes are beginning to spill over to the rest of the economy. Prices at the wholesale level rose 1.9 percent, the biggest increase since the first Persian Gulf War in 1990. Like the 1.2 percent September jump in consumer prices announced last week, the biggest in 25 years, the surge was led by energy costs reflecting the widespread shutdowns of production following hurricanes Katrina and Rita. But the report on wholesale prices raised more worries because it showed that outside of food and energy, price pressures were increasing. The so-called “core rate” of wholesale inflation rose by 0.3 percent last month after no change in August. The rise in wholesale prices stoked inflation fears on Wall Street and sent stock prices tumbling. The Dow Jones industrial average fell 62.84 points to close at 10,285.26. last_img

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