Martha MacCallum led off the 10 a.m. hour of America's Newsroom today with super-scary news that necessitated a Fox News Alert: "The headline this morning, folks, is that inflation is starting to rear its ugly head in America."
"Take a look at this," MacCallum said. "Very significant. Up 1.1 percent in the Producer Price Index. Usually you get a move, you know, in the tenths of a percent. That's a pretty decent move in prices in December." She continued: "Higher energy costs and higher food costs, so that adds up to one thing: that's a confirmation that there is inflation, which people have been fearing for quite some time. We're now actually seeing inflation kicking in."
That is wrong.
From the Associated Press' article on the Producer Price Index report for December:
Wholesale prices in December posted their biggest increase in nearly a year, lifted by more expensive energy and food costs. But most other prices were largely well behaved, suggesting inflation isn't spreading through the economy.
The Producer Price Index, which measures price changes before they reach consumers, rose 1.1 percent in December, the Labor Department reported Thursday. That was up from a 0.8 percent rise in November and was the largest increase since January 2010.
But outside the volatile energy and food categories, all other prices rose just 0.2 percent, down from a 0.3 percent rise in November. That lower reading on "core" prices indicates that inflation isn't breaking out.
Federal Reserve Chairman Ben Bernanke predicts inflation won't be a problem for the economy this year.
MacCallum had it completely backward. She said that higher energy and food costs "add up to one thing: that's a confirmation that there is inflation." In fact, setting aside the highly variable prices of energy and food shows that inflation is not occurring.
If this sounds familiar, it's probably because Glenn Beck has been relentlessly fearmongering about inflation for years, and recently, he has used increases in food and energy prices to bolster his case. Economists have explained why Beck's pronouncements are nonsense:
[A]ccording to Nobel Laureate Paul Krugman, these claims don't add up.
"Commodity prices are very variable -- they soared in 2007-8, probably in large part because of Chinese demand, plunged in 2008-9, thanks to a global slump, and have now recovered most but not all the losses," said Krugman. "They really tell you nothing about underlying inflation, which has been steadily declining."
And now we have Martha MacCallum repeating his nonsense. That follows a pattern in which Fox's "straight news" reports -- which Fox has eagerly sought to distinguish from its "opinion" programming -- amplify the crazy smears and activist agenda that Beck presents on his show.
Even Fox News' sister network, Fox Business, got this one right, and it's not exactly a paragon of accuracy. Here's Ashley Webster, mere seconds before MacCallum's report on Fox News:
WEBSTER: We also got reports on wholesale inflation and the trade deficit in December. Producer prices rising 1.1 percent. That was above estimates, but core inflation, which strips out the volatile food and energy prices, was in line.