Wholesale inflation takes biggest jump in 6 months – Yahoo! Finance

WASHINGTON (AP) — Inflation at the wholesale level surged unexpectedly in January, reflecting sharply higher prices for gasoline and other energy products.

The Labor Department said Thursday that wholesale prices increased by 0.8 percent last month, the biggest gain since last July and well above the 0.2 percent increase that economists had expected.

The acceleration was led by a 3.7 percent surge in energy prices with gasoline prices jumping by 15 percent, the biggest gain in 14 months.

Wholesale inflation takes biggest jump in 6 months – AP

Note: While some say (this article included) that the jump was unexpected and wont continue, other economist predicted this jump and say more is on the way. There are two main reasons:

1. They have to print money to fund the recent $787 Billion spending bill which decreases the value of each dollar so prices increase.

2. The president has put a hold on all off shore oil exploration until they have time to “look at it”. The magic number is $2.50 per gallon. That is when it is profitable for oil companies to drill off our shore. When congress did not renew the ban on drilling, the price DROPPED at a record rate. Now that they have put a hold on it, the price is going up again. It is the factor of competition in the market and a potential increased supply.

Still some economist say that inflation is a good thing because it means that people can afford to pay a higher price – but in our current economy, that doesn’t make sense. You be the judge.

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