Inflation in Food, Energy, Materials

Inflation is creeping up for manufacturers, according to this report on This may be good news for industry, as it indicates some degree of pricing power.

On the consumer side, core inflation is very low (0.1% in September), but overall inflation, which includes the volatile but important food and energy sectors was a blistering 1.2% in September. The measure of inflation for businesses, the Producer Price Index climbed a steep 1.9% last month, according to today’s New York Times. (The article notes the differences between the two measures of consumer inflation, and why it’s important to have one measure than includes food and gas, and one that excludes them.)

If you’ve been waiting to take a price increase, now is a good time, especially if the price increase can take the form of a fuel surcharge.

One Comment

  1. Jon


    While its important to point out to your readers the importance of volatile and non-volatile measures of CPI, there is another major problems with measures of CPI in nearly every part of the world.

    Inflation is a measure of the change in price for a basket of goods and services. You basket is different to mine, which is different from the DINK couple living in a NYC condo, which is different from the basket of goods purchased by an Idaho potato farmer.

    In the absence of unique measures of inflation for different segments of the community, its important for us as pricing professionals to understand our own customer segments.

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