Biz Dev in NYC by Rob Tsai

CBS Marketwatch picks up the Labor Departments release of the May Producer Price Index (PPI):

Led by another big gain in energy prices, wholesale prices rose a greater-than-expected 0.9% in May, the Labor Department reported Thursday.

Wholesale food prices fell 0.2%, the first decline in seven months.

Energy prices jumped 4.1%, the biggest increase in six months. Wholesale gasoline prices rose 10.2%…

Headline inflation has risen 4.1% in the past 12 months, the largest increase in a year. But core inflation at the wholesale level is up a moderate 1.6% in the past 12 months.

Dan Caplinger writes a good article on the Motley Fool on why the core rate of inflation is misleading:

One particularly egregious example of statistics gone wild is the so-called core component of the consumer and producer price index figures…

How realistic is it to leave out large fractions of the costs that consumers must bear in price index figures? In calculating the CPI, food and energy account for nearly a quarter of the entire index. In the PPI, they account for more than 40% of the index…

The argument is that food and energy prices are volatile, and so leaving them out presents a clearer picture of price trends in the economy…

The underlying assumption is that food and energy shocks are either temporary phenomena or eventually work into prices for other goods. The problem is that if food and energy price changes are temporary, the primary index will be misleading, while if price changes are permanent, then the primary index will lead the core index for a while. Recent experience strongly suggests the latter, as year-over-year CPI comparisons show the full index lurking above core changes during almost all of the past five years.

Now, what do you make of the news that Dow Jones is raising the price of its hallmark newspaper The Wall Street Journal from $1.00 to $1.50?  CBS Marketwatch reports:

The increase doesn’t include the subscription price, which means that more than 90% of the newspaper’s buyers won’t be affected. The increase is in response to the rising costs and falling advertising revenue that is afflicting the newspaper industry.

Inflation doves, I’m sure, would highlight this argument that a majority of readers are print or online subscribers (whose rates have not been increased).