Disappeared News: Does increase in retail sales mean recession is easing? No, it means we’re paying strongly inflated food prices

Saturday, May 08, 2010

Does increase in retail sales mean recession is easing? No, it means we’re paying strongly inflated food prices

“Many pundits are proclaiming that the U.S. recession is over and that inflation threats have been neutralized. But their hasty optimism does not factor in that 58 percent of February’s year-over-year increase in retail sales was not from improving consumer confidence, but from surging food and gasoline prices.”

by Larry Geller

The rising prices, alongside pandemic unemployment, have nudged tides of Americans onto the food stamp program. After the 14th consecutive monthly increase, 39.4 million Americans are now enrolled in the program. This figure is up 22.4 percent from one year ago, and the U.S. government is now paying out more to Americans in entitlement programs than it collects in taxes. [The Trumpet, U.S. Food Prices ‘Spiraling Out of Control’, 5/4/2010]

The article cites a National Inflation Association report which includes the following figures:

Here are some of the most startling year-over-year price increases in the U.S. markets:
    * Fresh and dry vegetables up 56.1 percent
    * Fresh fruits and melons up 28.8 percent
    * Eggs for fresh use up 33.6 percent
    * Beef and veal up 10.7 percent
    * Dairy products up 9.7 percent

Now, the business of the NIA is to find inflation, inflation is why they exist. Still, if these figures should be correct, they indicate that the recession will bite deeper, not less.

(Thanks to Viviane Lerner for finding this article. Viviane, how do you do it??)