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| September CPI (#1), John Williams, DSL - Oct. 17, 2005 |
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Summary
Last Friday, the Labor Department reported that consumer prices spiked 1.2% during September. The so-called "core" rate was up a mere 0.1%, however, forming the basis of Wall Street's attempt to spin the horrific overall result into something far more palatable. Elsewhere, some recent thoughts from John Williams, and DSL comes to Gillespie Research!
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The Arrival of Verizon DSL
Gillespie Research is involved in several projects at the moment, all designed to create significant enhancements in what we do and how we do it. I plan a series of update memos on this subject in the near future.
In the meantime, though, I want to report that over the weekend, I began the process of converting to DSL service, provided by Verizon. The increased speed and other benefits will be a huge plus going forward. However, since Verizon was two weeks ahead of its target date in the conversion, my own schedule -- research publication, etc. -- will have to be rearranged a little during the next week or so. Longer run, this improvement will be worth far more than the slight short-term disruption it creates.
September Consumer Prices
Last Friday, the Labor Department reported that the Consumer Price Index rose 1.2% during September, the largest monthly increase since the early 1980s.
For the few of us who do not eat, heat or drive, the CPI's so-called "core" rate, which excludes food and energy, was reported to have risen a modest 0.1% in September. Of course, the latter was the number Wall Street bulls bulled!
As of the end of September, the overall CPI stood 4.7% higher than a year earlier. Excluding food and energy, the year-over-year increase was 2.0%.
Tomorrow (10/18), the Labor Department will release September results for the Producer Price Index. This is the third and last government series we follow closely each month. (The others are import prices and the CPI, both reported last week.) After PPI results are in, I will publish a more detailed analysis of the performance of all three measures.
John Williams' Latest Material
Last Wednesday, John Williams published the October edition of his monthly newsletter, "Shadow Government Statistics." For those of you not familiar with John's excellent work, a trip to his website is definitely in order (www.shadowstats.com/).
Following is a brief excerpt from the October material:
"Economic numbers of the last month broadly confirmed an intensifying inflationary recession, but those data mostly pre-dated Hurricanes Katrina and Rita. The effects of the devastation in New Orleans and along much of the Louisiana, Mississippi and Alabama Gulf Coast have intensified the negative national economic trends but were not the root cause. Nonetheless, hurricane effects will dominate headline-grabbing economic reports of the next month or two, and Katrina likely will take much of the blame for a recession that has been in development for over a year and underway since July.
"The September report on labor market conditions -- the government's first post-Katrina report -- fell far short of reality and within the range of malfeasance, somehow missing the loss of at least another 150,000 payroll jobs, while the unemployed of New Orleans simply were ignored. One could even make the case that the weaknesses shown could have been generated by ongoing economic softness, alone, with no obvious impact from Katrina whatsoever. It appears that the administration's early response to the Gulf Coast disaster indeed was rapid and effective, not in providing relief to storm victims, but in jiggering impacted economic data to minimize the storm's reported effects.
"...The administration, however, is missing several significant points. First is risk of damaging its already limited credibility. Second, it has a nasty, inflationary recession on its hands, and, if it is not careful, the administration may find the public blaming it, not the hurricane, for the recession. Third, although the recession was in place before Katrina, the blame for the current economic woes could be shifted successfully to the effects of the natural disaster. ..."
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