From The Horse's Mouth

The CEO of Supervalue, a large supermarket chain said the following today, from Reuters:
What we have seen .(are increases) in a lot of commodities. I mentioned in the call that we have from a low of two- to three-(percentage)-point increases but there are some commodities like cooking oils where we have seen price increases in the low double-digit percents.
I know. I know. There is no inflation. The CPI says so.

8 comments:

Anonymous said...

I don't think a 7% rise in cooking oil matters. So many commodities rot and is unused. Also, commodities futures prices are like a rubber band in a secular deflationary environment with artificial (and desired) asset inflation. The fed wants controlled inflation. You're thinking upside down here.

Tsachy Mishal said...

Try paying for your food by telling that to them at the supermarket, gas station, clothing store, rent, etc.

Anonymous said...

Think low margin businesses which compete with costco and bj's such as the traditional supermarket have issues simply because they don't have the volume. I was at costco last weekend. Inflation? Nope. I'll be convinced there's inflation when the New York city hotdog vendor raises hotdog prices to $3.

revelo said...

I eat quite a bit of olive oil for my salads, though I don't cook with it. Maybe a liter month. $7 per liter at Trader Joes. 7% of $7 = $.49.

Meanwhile,

"Housing Market Slips Into Depression Territory"

http://finance.yahoo.com/news/Housing-Market-Slips-Into-cnbc-3469728013.html

Housing fell .8% from Oct to Nov, according to the Zillow article linked to from the yahoo article. Assuming a median housing value of $150K, then .8% * $150K = $1200.

Bottom line: cooking oil up 49 cents, housing down 1200 dollars, wages going nowhere. Doesn't sound inflationary to me.

Anonymous said...

There are rising prices amidst record inventories in a myriad of commodities. Fed is good at engineering asset inflation and blowing air after deflationary period which we entered in 2008. We are still below median inflation rates pre-2008. They have room to continue the "blowing" and desire more inflation.

Tsachy Mishal said...

REIS, which collects data on rents says rents are rising, which is what goes into CPI.

http://www.calculatedriskblog.com/2011/01/reis-apartment-vacancy-rates-decline-in.html

Anonymous said...

Revelo, right. We are actually in a deflationary environment and the fed wants inflation rates back up to speed. Inflate or die.

Anonymous said...

Rent prices have always risen. They didn't for a few years cos of deflation.