And The Government Says Inflation Is WHAT?

By Douglas A. McIntyre Updated Apr 6, 6:07PM EDT · Published Apr 11, 7:58AM EDT

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Import prices surged in March and some of the price jumps are a record for modern trading history. Even the Labor Department’s reputation for under-reporting inflation statistics can’t mask the high inflation. Oil is only part to blame as non-petroleum costs broke many records.

Overall import prices rose by +2.8% in March, after increasing an unrevised 0.2% in February. Economists were expecting import prices to be up by +2.1% in March.

But it just goes from bad to worse. The year over year readings show that since March 2007, import prices have risen by a whopping +14.8%. Last year’s "year over year" levels showed that prices rose by +2.8%.

Petroleum import prices increased 9.1% last month and fell 1.9% in February, but these same prices soared by about 60.0% since March 2007.

If you take out energy costs, other import prices rose by +1.1% in March and by +5.4% since March 2007. That year over year reading is nearly twice the level of last year. It looks like the increase in non-petroleum prices is the largest one-month increase since the index was first published monthly in December 1988.

There was a 3.6% hike in industrial supplies and materials prices, tied mostly to prices for unfinished metals. Imported food, feeds and beverages rose by +2.5%, consumer goods rose by +0.5%, autos rose by +0.2%, and capital goods were unchanged.

The break-down by country is also rather revealing. Prices from China rose by +0.7% and by +3.2% from Canada. Prices from the European Union prices rose by +1.6% and prices from Japan rose by +0.1%.

The good news is that EXPORT prices are also rising.

The bad news is that this is all inflationary as hell. At least we aren’t seeing 10% yields on CD’s and 9% or higher on mortgages.

As far as the critics calling for China being unfair with having its peg to the US Dollar…. be careful what you wish for.

Jon C. Ogg
April 11, 2008

Jon Ogg produces the Special Situation Investing Newsletter. He can be reached at [email protected] and he does not own securities in the companies he covers.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.