Alternative Visions- Unpacking the CPI and PPI Inflation Reports - a podcast by Progressive Radio Network

The mainstream media is now spinning last week’s inflation reports to message that inflation is now under control, therefore the Fed won’t need to raise rates further, and that in turn means a ‘soft landing’ with no recession. Dr. Rasmus dissects both the consumer price index and producer price index reports issued last week. Reports show that ‘goods’ (manufactured things and construction) prices have abated in price, but Services prices (80% of US economy) remain stuck in the 5-6% annual range. In fact, June CPI shows services prices rising more (6.2%) compared to May (5.3%). While some sectors of services are declining (airline,hotels prices) rents remain high. Simultaneously, after falling sharply, energy (gasoline, etc.) prices are rising again as are commodities, housing and utilities. Rasmus explains some of the questionable methods the US Labor Dept uses to dampen actual price hikes—like ‘owners equivalent rent’, ‘hedonic pricing’, outmoded ‘weights’ given certain goods, and by selectively using 14 different ‘base periods’ for different key items in the index. Rasmus concludes, services inflation and price gouging remain the defining conditions of current chronic inflation. And that the Fed can’t raise interest rates higher without further exacerbating the regional banking instability

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