November Average Retail Prices - Deflation express

Big declines in gasoline prices in the November consumer price index, as the average retail price drops from $3.20 to $2.21 per gallon. From BLS, news of a record decline:


The Consumer Price Index for All Urban Consumers (CPI-U) decreased 1.9 percent in November, before seasonal adjustment, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The November level of 212.425 (1982-84=100) was 1.1 percent higher than in November 2007.

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) decreased 2.3 percent in November, prior to seasonal adjustment. The November level of 207.296 (1982-84=100) was 0.7 percent higher than in November 2007. The fruits and vegetables index also declined for the third month in a row, with the decrease being driven by a decline in the fresh fruits index

From CNN

Tuesday's report is just further indication that consumers have dramatically shifted their spending habits in the past few months, opting to save money or pay down debt rather than spend it. A separate report released by the Federal Reserve last week showed American household debt fell for the first time ever in the third quarter, as net worth dropped by the largest amount on record based on data going back to 1951.


Here is the scorecard on produce commodities.

Uh-Oh

U.S. consumers got hit with a 9.2% inflation rate in June, year on year, according to yesterday's consumer price index from the Bureau of Labor Statistics. We all know that paying more than $4 per gallon for milk and for gas is a shock to the pocketbook. The cost per pound of bread in June was $1.37 compared with a $1.19 at the same time last year. Some produce prices also climbed higher, with red delicious apples at $1.25 per pound compared with $1.11 a year ago.  Banana prices were 63 cents per pound compared with 50 cents per pound a year ago. Tomato and lettuce prices were virtually the same as a year ago and navel orange prices were off substantially, the BLS reports.

Here is a link to some coverage of this new round of "stagflation." From AP:

The Labor Department said wholesale inflation, driven by skyrocketing gas and food costs, rose by 9.2 percent for the 12 months ending in June -- the fastest pace since the summer of 1981, during another energy crunch.

At the same time, consumers hit the brakes hard despite a massive infusion of government stimulus checks. Retail sales turned in their poorest showing in four months.

Federal Reserve Chairman Ben Bernanke delivered a somber midyear outlook to Congress, saying the U.S. faces "numerous difficulties" despite the Fed's interest rate-cutting campaign, which began last September in hopes of preventing a recession.

Adjusted expectations

Millions of acres of flooded farm land in the Midwest could up food price inflation expectations to as much 9% this year, analysts said this morning. Food price inflation in 2007 was a touch over 4%. Fruits and vegetables haven't shown much upward price level at retail in recent weeks, however. The latest Consumer Price Index for May showed the index for fruits and vegetables, which increased 2% in April, was virtually unchanged in May. A 0.7% decline in the indexes for fresh fruits offset increases in the indexes for fresh vegetables and processed fruits and vegetables - up 0.5 and 0.4 % respectively. Higher fuel and fertilizer costs and lower expectations for Chiquita took a toll on both Chiquita and Fresh Del Monte yesterday.

Fruit falls from Chiquita's tree

Fresh Del Monte shares drop 20 percent

Retail performers

What fruit commodities have shown the most increase in retail prices since the 1980s? Which have shown the least? What does that tell us about consumer demand? As some of you might have guessed, bananas have shown the smallest price variation since the 1980s, followed by valencia oranges. Grapefruit and seedless grapes have shown the biggest increase. In this analysis of Department of Commerce data, I've noted the average change in retail prices over time for a selected group of fresh fruit.

Continuing the retail theme, news report of SuperValu's plan to divest 15 stores in Milwaukee