Inflation Remains Moderate, Smoothing the Road

Those raising the inflation alarm are concerned about the large amount of liquidity that the Federal Reserve has pumped into the financial system. They note that when governments and central banks print too much money, inflation results. However, they ignore the massive deleveraging that has occurred in the financial system over the past two years. – Courtesy of upload.wikimedia.org

Despite the concern of several economic commentators, inflation continues at a moderate pace. In June, Consumer Price Index rose 0.7% from May on a seasonally adjusted basis. However, the index fell 1.4% from June of last year. Excluding volatile food and energy prices — energy prices dropped 25.5% while food prices rose 2.1% — the index actually was up a modest 1.7% from June 2008.

The Producer Price Index reported similar numbers — up 1.8% in June from May, on a seasonally adjusted basis, but down 4.6% from June 2009. Taken together, the two indexes suggest that inflation is not an immediate problem. This is good news when making purchasing decisions for your landscape business, as prices should remain relatively stable. – Courtesy of NAHB