Friday, December 14, 2007

Caffeine High

Wholesale Inflation Surges, But Sales Up

A record jump in gasoline prices pushed up wholesale inflation in November at the fastest pace in more than three decades, while retail sales showed unexpected strength.

The Labor Department said Thursday that wholesale prices rose by 3.2 percent last month, the biggest increase in 34 years. The jump reflected a 34.8 percent surge in gasoline prices. Outside of energy and food, core inflation posted a 0.4 percent jump, double what was expected.

But in more upbeat economic news, the Commerce Department reported that retail sales increased by a better-than-expected 1.2 percent last month. It was the biggest sales advance in six months and evidence of widespread strength in a number of areas, from department stores to clothing shops and furniture stores.

AP 12/13/07

A student at Freiburg University ordered a cup of coffee at a cafe. The price on the menu was 5,000 Marks. He had two cups. When the bill came, it was for 14,000 Marks. "If you want to save money," he was told, "and you want two cups of coffee, you should order them both at the same time."

George Goodman (pen name Adam Smith), Paper Money, 1981


Anonymous John Wendt said...

The experience of the student seems to be an extreme example of pricing by replacement cost rather than acquisition cost. In other words, making the customer provide your working capital. But vendors sometimes seem to use replacement cost on the way up, acquisition cost on the way down.

12/14/2007 8:28 AM  
Anonymous Dave L said...

I have the feeling meny people don't realize that the retail sales numbers are reported in current dollar terms.

12/14/2007 9:18 AM  
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Great political cartoon

12/15/2007 1:13 PM  
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12/15/2007 7:24 PM  
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