Let's look at that again.
The prices of finished energy prices decreased .2% last month.
Here's more from the same report:
In April, the index for finished goods other than foods and energy moved up 0.4 percent and was partially offset by prices for energy goods, which fell 0.2 percent. The index for finished consumer foods was unchanged from its March level.
Let's debunk that line of crap. Here are two graphs/charts. The first is from "This Week in Petroleum" and it shows this year's gas prices verses last year's gas prices:
I'm still looking for the hidden price declines in retail level gas. Maybe I don't have the appropriate decoder ring.
Here's a chart of gas futures. I blocked-off April.
That's one hell of a decline, isn't it?
I realize there is probably a statistical thing going on here. But frankly, where "seasonal adjustments" fly this much in the fact of objective reality, I have to question the veracity of the actual numbers being reported.
2 comments:
Seasonal adjustment, bonddad.
Here's from the BLS's report of PPI yesterday:
"Before seasonal adjustment, the Producer Price Index for Finished Goods increased 0.7
percent in April to 176.7 (1982 = 100). From April 2007 to April 2008, finished goods prices
rose 6.5 percent. Over the same period, the finished energy goods index advanced 17.5 percent,
prices for finished goods less foods and energy increased 3.0 percent, and the index for finished
consumer foods climbed 5.2 percent."
If you check out the EIA data you link to in your post, you will find the data backing up the following:
"For the 10 year period of 1998-2007, calculated the first week of April vs. first week of March, gasoline prices averaged a monthly increase of 7.3%. In 2008 in the same period they rose 5.4%. Thus on this calculation 1.9% less than average."
It's all about the percentages. As pointed out in the post above, if gasoline goes up 7.4% and the base price was $2.00/gallon, it would then be $2.15/gallon. Of course now, the base line is $4.00/gallon going up to $4.22/gallon. That feels a lot worse even if in percentage terms it's better.
Basically we've just seen a shift upward in the baseline price of gasoline. Seasonal demand is still what it always was and we'll likely see a decline in price again come the end of the summer, but that doesn't offset the very real increase in the baseline cost of gasoline which is unlikely to change any time soon.
Here in Chicago, gasoline seemed to hit a plateau at just under $4.00, but then last night I was seeing regular for $4.38/gallon. I cannot tell you how happy I was to be WALKING past that gas station rather than driving up to it :)
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