Friday, September 14, 2007

China Continues to Export Inflation

Is this going to lead to an inflation tsunami down the road. My vote? Yes.
clipped from

Prices of U.S. imports from China rose 0.3% in August, the fourth consecutive monthly rise of at least that magnitude, the Bureau of Labor Statistics reported this morning. Before May, they had never risen by more than 0.2% in one month since publication of the data began in December, 2003. The increase came in a month when total import prices fell 0.3%, or 0.1% excluding oil.

China’s shift from source of deflation to source of inflation appears to reflect a strengthening Chinese currency, upward pressures on wages and other costs there, and rising prices of energy and commodities used to make many Chinese goods.

Prices of imports from China are up 1.1% from a year earlier, the BLS said. Total import prices are up 1.9%,or 1.5% excluding oil. – Greg Ip

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