The Labor Department announced that U.S. wholesale prices jumped a seasonally adjusted 1.7% in August, mainly because of higher fuel prices. Excluding the volatile categories of food and energy, so-called core wholesale prices rose a much smaller 0.2%. Economists surveyed had predicted a 1.5% increase in the overall producer price index and a 0.2% rise in core PPI. The energy index surged 6.4%, led by a 13.6% increase in gasoline and an 11.9% rise in natural gas. The wholesale cost of food, meanwhile, rose a sharp 0.9%, as the price of eggs and dairy went up.
As inflation jumped, applications for U.S. jobless benefits jumped by 15,000 to a seasonally
adjusted 382,000 in the week ended Sept. 8. About half the
increase related to tropical storm Isaac, the Labor Department said. This is the highest level of claims since mid-July. Last month job creation slowed and many people left the work force. Many of the jobs created in the last few years are low paying, this means that incomes are not keeping pace with rising cost. Housing cost remain tame, when they begin to rise, expect concern over inflation to explode. These trends do not bode well for the nation going forward.