The Bureau of Labor Statistics reports today that consumer prices increased at a seasonally adjusted annual rate (SAAR) of 5.2% for the second quarter of 2007.
This brings the year-to-date annual rate to 5.0 percent and compares with an increase of 2.5 percent in all of 2006. The index for energy, which rose 2.9 percent in all of 2006, advanced at a 27.8 percent SAAR in the first half of 2007 [emphasis added] and accounted for about 48 percent of the advance in the overall CPI-U during that period. Petroleum-based energy costs increased at a 48.3 percent annual rate [emphasis added] and charges for energy services rose at a 5.5 percent annual rate.
The food index rose at a 6.2 percent SAAR in the first half of 2007 and contributed about 17 percent to the overall CPI-U increase in the first six months. Grocery store food prices increased at a 8.0 percent annual rate in the first half of 2007, reflecting acceleration over the last year in each of the six major groups. [emphasis added] These increases ranged from annual rates of 14.8 percent in the index for dairy products to 5.5 percent in the index for other food at home.
Tell me something I don’t already know. Every month when I pay bills, I’m painfully aware that energy, petroleum, and grocery prices are all skyrocketing. And the money left at the end of the month keeps shrinking and shrinking. It’s depressing, frankly.
Looks like the fast rising price of gas/diesel is the reason. Just wait until the 3rd quarter report comes out and how the new minimum wage affects prices.
Increase in food prices are due in part to our increasing use of corn ethanol. Corn ethanol primarily benefits two groups: farmers, many of whom are large corporations, and politicians from farm states and those who need Iowans’ votes in the primaries.
The rest of us are stuck with higher prices for corn, soy (due to more corn planted), milk, beef, etc. It will only get worse as ethanol use is projected to skyrocket.
RTP: Amen.