Bureau of Labor Statistics (BLS) is a principal federal agency that is responsible for measuring, collecting and analyzing the macroeconomic data of the US economy. The organization is headquartered in Washington DC, and is accountable to Federal Government of United States.
Bureau of Labor Statistics (BLS) carries out its work with the mission of collecting, analyzing and then disseminating the essential economic information to facilitate the public and private decision-making, and hence, carries significant importance for the US economy. For Instance, policy makers will frame the economic policies only after witnessing the trend in macro-economic data supplied by BLS. Similarly, private enterprises also frame their plans after analyzing the trend related to consumer spending, wage growth et cetera.
Important to note, data supplied by BLS is unbiased and is never disseminated until it meets the criteria of impartiality in the subject matter and the data presentation. Furthermore, to avoid any appearance of impartially or biasness, the dates for release of major economic data are already scheduled in advance for more than a years’ time. Hence, we believe the data issued by BLS is highly unbiased.
Bureau of Labor Statistics issues and publishes data relating to:
Inflation and Prices
Pay and benefits
International Comparison Data
a) Monthly Price Graphs:
b) Monthly % Price Change Graph
Referring to the data issued by Bureau of Labor Statistics, the coffee prices soared significantly during 1994 period, primarily during August, 1994 when the prices went up by 34.09%, in one month. The following could be possible reasons for such a sharp price rise:
i) Fall in supply
Following the price mechanism rule, the price of the commodity is bound to increase when the supply falls, as this creates shortage in the market, and in the presence of demand pressures, price of the commodity moves upward. The effect is shown graphically hereunder:
ii) Increase in price of substitutes
If the price of substitute goods of coffee such as tea would have surged, then this would have resulted in increase in demand of coffee, further leading to increase in the price. The effect is shown graphically hereunder:
iii) Cold weather conditions
If the weather conditions at that time in US would have turned colder, then the demand would have seen a sudden increase, and in the presence of constant supply, the prices would have increased accordingly. The effect is shown graphically hereunder:
iv) Increase in excise taxation or import duty
If the Federal Government would have increased the excise rates or the import duty on coffee, then the supply would have been decreased, while in the presence of even constant demand, the prices would have increased. . The effect is shown graphically hereunder:
Real Causes of Increase in Coffee Prices:
i) Severe frost in growing regions of South America-
Amid the severe frost in the growing regions of South America, the supply of coffee was disrupted, and this resulted in the price increase of coffee.
ii) Low revenue growth in recent years:
Since farmers did not earned appreciable revenue figures from the coffee production over the past few years, only a little amount was re-invested in their farms, thus resulting in lower production than previous years, which subsequently lead to higher prices.
i) Frost in Brazil
The supply of coffee beans was largely disrupted after the frost affects the production in growing areas of Brazil.
i) Bad weather conditions in Brazil
The price of coffee beans was skyrocketing as a result of June and July freezes in Brazil that damaged an estimated 50 percent of the country's coffee bean.
i) Frost in Brazil
Severe frost in Brazil and overall tight coffee supply from around the world, are the reasons for increase in coffee prices.
ii) Market Speculations
While the poor weather conditions in growing area are the core cause behind the increase in the stock price of coffee, market speculations are doing the worst and pushing the prices upwards.
i) Frost in Brazil
Report from United States Department of Agriculture confirmed that the severe frost in Brazil is the cause behind increase in the price levels of coffee.
Consistency with above hypothesis
As we now know that the major cause of increase in the price of coffee was the frost in growing areas, our hypothesizes related to fall in supply being the reason of price increase, seems to be in agreement with the main cause.
Here is the difference which we found between a scholar article and trade journal:
A scholar journal is written by research or subject experts; while a trade journal is written by technical writers or specialized journalists.
As scholarly journal is written to report scholarly idea supported by a research methodology to add knowledge to the existing subject matter; while a trade journal is written for other members of trade where the author assumes that the reader has a certain level of knowledge on the subject.
A scholarly journal is most of the time supported with a bibliography, while occasionally a bibliography is included in journal article.
A scholarly journal is published by a university press or professional organization; while a trade journal is published by a trade association.
Thus, since scholarly journals are supported with a research methodology to support their view, they are assumed to be more credible. However, there have been instances, when different scholars come up with different conclusion on same subject matter as each have their own assumptions of the related research methodology. Thus, it is not assured that a scholarly journal will always be credible.
Harman, L. (1994). Coffee prices boiling over, but just perking in S.D. San Diego Business Journal, 14.
Harter, A. (1994). Coffee prices are steaming in Baton Rouge. The Greater Baton Rouge Business Report, 18.
King, J. (1994, September 12). The jump in java prices stirs city's coffee market. Retrieved March 27, 2015, from http://search.proquest.com.ezproxy.gvsu.edu/abidateline/docview/202649691/66794D1AD3AC4BD7PQ/1?accountid=39473
MacLachlan, S. L. (1994). US coffee producers defend steep prices. The Christian Science Monitor, 8.
Moix, L. (1994). Starbucks Coffee Company responds to rising coffee costs. PR Newswire, 1.
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