Wednesday, August 17, 2005

Economic Spin 101

See if you can spot the spin:

Over the past 12 months, wholesale prices have risen by 4.6 percent while the core inflation rate, excluding food and energy, has risen by a more modest 2.8 percent.

The spin is the cute little term "core inflation." Sounds like the REAL inflation, right? Wrong.

The REAL inflation does NOT exclude food and energy

When you read the entire story at the link, you will find that wholesale prices accelerated very sharply last month (0.5%), but retail/finished goods (CPI) has not shown the last wholesale jump. Not to worry--in less than 90 days, that 4.6% (++) wholesale inflation rate will be visible to regular, normal people (so long as they eat and use energy.)

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