International Investing

Who are you going to believe, government statistics or your lying eyes? The increase in food and energy prices is something the man on the street has been feeling for the past year+ but has been massaged out of the official numbers. Year-over-year the increase looks awful.

Consumer prices rose by 4.1 percent for all of 2007, up sharply from a 2.5 percent increase in 2006, the Labor Department said Wednesday. Consumers felt the pain when they filled up their gas tanks or shopped for groceries. Prices for both energy and food shot up by the largest amount since 1990.In a second report, the Federal Reserve said that output at the nation’s factories, mines and utilities showed no growth in December, adding to a string of weak economic reports showing that the economy was slowing at the end of last year.

That weakness has shown up in the biggest one-month jump in unemployment since the 2001 terrorist attacks and billions of dollars in losses at many of the country’s biggest financial institutions.