The big monthly inflation reports are due out this week, and while inflation risk presently is low in the United States – indeed as the global economy falters, economy watchers fear the reverse – the Bureau of Labor Statistics reports still can be mined for some interesting story nuggets.
First on Wednesday comes the Producer Price Index, which reports on the wholesale costs to providers of goods and service. This report will reflect May prices, and if the spring trend continues, falling oil prices and other lowered energy costs will pull the index downward.
Mine the report for items that pertain to your beats. For example, last month’s PPI notes that discount department stores were enjoying a 9.1 increase in profit margins. So, does that mean consumers were waiting less for sale prices, and if so, why? Is that trend continuing through late spring? Clothing stores and gas stations also enjoyed a margin boost.
Meanwhile, chickens destined for the chopping block were fetching 12 percent less in April; what was up with that? More focus on Easter hams or a surplus of hens caused by feed-price or weather factors? Tracing these blips back to their origins can unearth some examples that will help you show the variety of factors and inputs the firms you cover must juggle in their quest for profitability.
Then there’s the Consumer Price Index; due out Thursday. The CPI is rising, which is normal in an economic recovery, but harder for folks to swallow when incomes are pretty flat and unemployment slow to mend. Food and energy are the most volatile components and often those that produce the most emotional reaction from readers, because we can’t really go without eating or commuting for long.
A New Jersey radio station framed news about food prices in a clever way, as “Barbecue costs skyrocketing this summer,” and it’s an eye-catching (or ear-catching) report that uses the ingredients for an ordinary cookout to explain the gains in prices. It’s akin to those perennial stories about the cost of a turkey dinner or how much a partridge in a pear tree will run you at Christmas time, but these gimmicks are revisited because they work — they make economic concepts understandable to a wide range of readers. You could profile the cost of a camping trip, or a 4th of July picnic, or a trip to the regional theme park, or some other familiar activity to show your audience which prices are waxing and which are waning.
Meanwhile, one oft-unexplored area of the CPI are the non-consumable items -reports tend to focus on food, clothing, gasoline, utilities and such. But big-ticket items like rent and medical care are reported upon, too, along with services like trash collection and even pet products and services.
You can scan the percent-change column of the table to see what leaps out – why, for example, does last month’s report show that car and truck rental fees jumped 4.4 percent? Maybe it’s just a seasonal thing or maybe it’s a reflection on the business travel and tourism sectors. Seems worth a few calls to find out, and the same goes for shelf-stable fish and seafood. What’s going on with tuna or other canned fish that’s propelling prices up more than 3 percent?