March 26, 2017

Consumer Prices Rise Again

The consumer price index, which is basically another way to say inflation, increased 0.2% in October – the fourth consecutive month consumer prices have risen. An increased price of gasoline is responsible for 90% of the October incline, according to a consumer report [.pdf] released today from the Labor Department. Gasoline prices increased 4.6% during October, which marks the fourth consecutive month gasoline has risen higher than the price of any other consumer good. Other price increases during October include electricity (0.4%), transportation services (0.3%), and food away from home (0.1%).

As has been discussed in the past, energy prices are not only going up for consumers, but also for producers. This correspondence should not be a surprise, since increases in production typically lead to increases in prices. In fact, the producer price index, which measures the production costs of goods, had a 3.7% increase in the cost to produce energy during October; the highest price rise among the production of any other consumer good, according to the PPI report [.pdf]. With the visible swelling of both energy production and consumer energy prices, an inclining energy market is becoming more of a trend than a coincidence.

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