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Wholesale prices rise in August

Federal Reserve Board Chairman Ben Bernanke speaks during a dinner at the Federal Reserve Building on October 8, 2009 in Washington, DC.

The Federal Reserve wraps up its two day policy meeting today. It's expected to announce whether it will pump more stimulus money into the U.S. economy. That would be a third round of so-called quantitative easing.

Meanwhile, we just got inflation numbers for August. Wholesale prices increased 1.7 percent last month -- the biggest jump in three years.

Diane Swonk, chief economist with Mesirow financial in Chicago, says that the jump is significant because a big part of it stems from rising energy prices, with a portion also attributed to rising food prices associated with the drought.

"This is less of an inflation problem," she says, "because it's not being pushed onto final consumer goods prices. But it is hurting those families that are having to fill up their car and put food on their tables."

It's more of a demand problem than an inflation problem, she adds.

 

About the author

Diane Swonk is chief economist with Mesirow Financial, based in Chicago.

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