why are pundits silent on return of double-digit inflation?

Aug.26, 2008 in Market Outlook

By Irwin Kellner, MarketWatch

“Perhaps they are taking their cue from the recent drop in oil prices. After all, the earlier jump in the price of petroleum is generally recognized as the main reason why inflation heated up in the first place.
Or maybe they buy into the argument that the economy will slow enough to prevent business from raising prices and labor from getting pay raises. When times are bad, boosting prices or wages almost always reduces demand for these particular goods and services.”

“But inflation has already reached worrisome levels.
Consumer prices are now 5.6% higher than they were a year ago. This is the largest yearly increase in 17 years.
At the producer, or wholesale, level, prices are climbing even faster. July’s index soared 1.2% over June’s level. This is an annual rate of nearly 15%! And compared with last year, July’s index was 9.8% higher — the fastest such jump in 27 years.
If this is not double-digit inflation, I don’t know what is.”

At the producer, or wholesale, level, prices are climbing even faster. July’s index soared 1.2% over June’s level. This is an annual rate of nearly 15%! And compared with last year, July’s index was 9.8% higher — the fastest such jump in 27 years.

Double-digit inflation has returned to the United States for the first time since the bad old days of 1981.

Did you like this? If so, please bookmark it,