US Inflation Index 'Missing', but Alternates Show Giant Jumps
Dan Spillane - Citizens for Corporate Accountability
-Official US PPI inflation index said missing due to 'aging computers'
-Alternate indexes show large jumps in inflation--but US Treasury Secretary unaware
-Some US companies laying off due to jumps in inflation
(SEATTLE) March 8 - The US Bureau which reports an important US inflation index has postponed indefinitely releasing the
figures. The US Producer Price Index (PPI) has not been released for January, and will not be for February either.
The missing PPI can show inflation earlier than the CPI, because it measures pressure at manufacturers, instead of when
inflation finally shows up at the consumer level.
According to a report, there are software and computer problems that are delaying the release for an 'unheard of' amount
of time. However, other departments in the same Bureau haven't had problems reporting indexes, such as the Consumer
Price Index (CPI). (1)
The loss of the PPI data comes at an unfortunate time. In testimony, Alan Greenspan recently suggested that the type of
inflation measured by the PPI was only temporarily suppressed due to 'hedging' activities. Moreover, measures similar to
the missing PPI, which also measure inflation at the production level, have shown a marked rise lately. For example, the
Journal of Commerce index shows an inflation rate of over 40 percent. (2) Likewise, a second index, the " ISM prices
paid component" showed a jump in inflation which hasn't been seen since immediately before recent bond and stock market
crashes.
The disappearance of the PPI figures also comes after a December report by Citizens for Corporate Accountability, which
noted "juggling" of math related to energy prices, that resulted in a lower December PPI.
The absence of the PPI already presents problems. Disturbingly, a number of US companies have recently announced
earnings shortfalls or job layoffs due to skyrocketing US inflation, which might otherwise have been noticed before
hand. Apparently unaware of the situation--and as recently as this week--US Treasury Secretary John Snow stated
inflation wasn't a problem. Mr. Snow was also quoted last year as saying the US economy would generated a large number
of jobs as a result of the Bush economic program, which never materialized. (3)
(1) See Missing Reports.
(2) See Alternate to PPI up 40pct.
(3) (Bloomberg 03/09/04) "Snow yesterday said tame U.S. inflation"