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Economic Insanity
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The following article from The Los Angeles Times needs no further comment:

Consumer prices up just 0.2% in April -- but there's a catch
Adjustments for seasonal change negate the effect of rising energy prices, because energy prices normally go up at that time of year. Food costs go up 0.9%.

By Maura Reynolds, Los Angeles Times Staff Writer
May 15, 2008
Gasoline prices are up more than 20% from a year ago and food prices have risen 5%, but inflation was fairly mild last month, the government reported Wednesday.

If that comes as a shock to you, you're not alone. Economists say the consumer price index's 0.2% increase in April was more a fluke than an accurate snapshot of the economic conditions encountered by most Americans.

Such a view didn't stop Wall Street from delighting in the report. The Dow Jones industrial average surged as much as 160 points before retreating during a late sell-off in technology stocks. The blue-chip average finished up 66.20 points, or 0.5%, at 12,898.38.

Even the Labor Department seemed to recognize that the figures would strike most people as counterintuitive at best and went to great lengths to explain why its report said prices at the gas pump actually fell 0.2% last month. The reason: The consumer price index is seasonally adjusted.

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