U.S. producer prices rose 0.8 percent in January in line with expectations on an increase in energy prices, a Labor Department report showed Wednesday.
Producer prices rose 3.6 percent over the last 12 months, slightly more than the 3.5 percent expected by analysts polled by Reuters.
Core producer prices rose a larger-than-expected 0.5 percent on a jump in pharmaceutical preparations and plastic products. Analysts had forecast a 0.2 percent gain.
So if energy prices were to stay flat, say by people getting rid of SUVs and driving smaller cars, then the price of everything would drop? Why doesn’t the government tax SUVs out of existance?
Because the vast majority of OIL is not being consumed by cars. Only 44% – 50% of oil is turned into gasoline, of that approximately 40% is being used in the United States. How much would eliminating gas guzzlers save? Not enough to keep the energy price curve “flat” as you described. Besides **** Opec and peak oil hurf durf.