Notice that the reporter here still claims that inflation isn’t a bad thing even as the necessities people can’t do without are rising beyond their ability to purchase them. Lucky for us increases in food and fuel aren’t anything to worry about, right?
WASHINGTON (AP) — Consumers paid more for food and gas last month, although inflation outside those volatile categories was tame.
The Labor Department says the Consumer Price Index rose 0.3 percent in September, below a 0.4 percent rise in August. Excluding food and energy, so-called core prices increased 0.1 percent, the smallest rise since March.
Inflation has worsened this year, after the cost of oil, grains and other commodities spiked in the spring. But economists expect price increases to moderate in the coming months as weak growth lowers commodity prices.
A small amount of inflation is good for the economy. It encourages businesses and consumers to spend and invest money sooner rather than later, before inflation erodes its value.
Still, Americans are facing higher food and gas prices at a difficult time. Unemployment has been roughly 9 percent for more than two years. Hiring is slow and few people are seeing much in the way of raises. Steeper prices for basic necessities have forced many to cut back on more discretionary purchases. That has slowed overall growth.
Food prices rose 0.4 percent in September, pushed up by big increases in the dairy, cereals, and fruits and vegetables categories. Gas prices rose 2.9 percent.
Dairy prices have jumped 10.2 percent in the past year. Gas prices have soared 33.3 percent.
Hey, your dollar losing it’s value is good because it makes you consume! Keynesian economics at it’s best. But for the rest of us who don’t believe in the broken window theory of economics this is bad news.