Thursday, December 16, 2010

Yup. Food Inflation

Although I've been told this by The Authoritative Source, there are doubters.

Until this report.

Grocery prices grew by more than 1 1/2 times the overall rate of inflation this year, outpaced only by costs of transportation and medical care, according to numbers released Wednesday by the U.S. Bureau of Labor Statistics.

Oh, wait! It gets worse!

Economists predict that this is only the beginning. Fueled by the higher costs of wheat, sugar, corn, soybeans and energy, shoppers could see as much as a 4 percent increase at the supermarket checkout next year.

Nothing to see here. After all, gasoline is stable "volatile". So that doesn't count.

...Since November 2009, meat, poultry, fish and eggs have surged 5.8 percent in price. Dairy and related products have gone up 3.8 percent; fats and oils, 3 percent; and sugar and sweets, 1.2 percent.

BLS uses "hedonics" pricing which was invented by Al "Bubbles" Greenspan. That means that when you notice the price of steak going up, you substitute hamburger. If cereal prices are high, you substitute with dry cat food.

Unless you don't.

But "Bubbles" was too busy keeping rates artificially low to know about How the Little People Live. So in BLS' view:

....overall inflation nationwide was 1.1 percent, grocery prices went up 1.7 percent nationally...

Expect more fun!


J. Strupp said...

Here's the BLS data from CPI. Just so you don't scare yourself too much:

"The food index rose 0.2 percent in November after a 0.1 percent
increase in October. The index for food away from home rose 0.1percent while the food at home index rose 0.3 percent. Among the six major grocery store food groups that comprise the food at home index, the index for nonalcoholic beverages posted the largest increase, at 0.8 percent. The index for meats, poultry, fish, and eggs rose 0.5
percent, due mostly to a 6.6 percent increase in the index for eggs. The index for cereals and bakery products rose 0.4 percent, and the index for other food at home advanced 0.1 percent. The index for dairy and related products, which rose 1.1 percent in October, was unchanged in November. The only major grocery store food group index to decline in November was fruits and vegetables, which fell 0.2 percent after a 0.7 percent decline in October. Within that group,the index for fresh fruits rose 2.0 percent but the fresh vegetables index fell 2.0 percent. Over the past year, the index for meats,
poultry, fish, and eggs has risen 5.8 percent and the dairy and related products index has increased 3.8 percent. The other grocery store food groups posted much smaller changes."

Tim Morrissey said...

For the life of me, I can't understand why ANYONE pays ANY attention to ANYTHING Greenspan says.