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Whew! Inflation is in check. Thanks .gov

Discussion in 'Financial Cents' started by Clyde, May 14, 2008.

  1. Clyde

    Clyde Jet Set Tourer Administrator Founding Member

    Other than food, there seems to be simply minimal inflation according to the .gov. Well, thanks .gov. Now the FED can continue to lower interest rates and continue to **** the dollar and the future for our children!

    By MARTIN CRUTSINGER, AP Economics Writer 20 minutes ago

    Inflation pressures eased a bit in April despite the biggest jump in food prices in 18 years.
    The Labor Department reported Wednesday that consumer prices edged up 0.2 percent last month, compared to a 0.3 percent rise in March.
    The lower inflation reflected a flat reading for energy, which helped offset a 0.9 percent jump in food costs as prices climbed for many basic items, from bread and milk to coffee and fresh fruits.
    The unchanged reading for energy reflected a big 4.8 percent jump in natural gas prices, offset by a 2 percent decline in gasoline costs.
    The reported drop in gasoline prices reflected the government's accounting process, which discounts expected seasonal price changes.
    Since gasoline prices normally rise significantly in April, the 5.6 percent rise in prices for the month turned into a 2 percent drop after the government adjusted for normal seasonal changes. That was little comfort for motorists now paying record prices at the pump, which are nearing $4 per gallon.
    Core inflation, which excludes food and energy, showed prices well behaved in April, rising by just 0.1 percent, compared to a 0.2 percent gain in March.
    The 0.2 percent reading for the overall Consumer Price Index was slightly lower than the 0.3 percent rise that economists had been expecting and the 0.1 percent rise in core inflation was below the 0.2 percent reading that had been expected.
    Those better-than-expected performances should ease concerns at the Federal Reserve that the sharp increase in food and energy prices this year would lead to broader inflation problems. However, economists cautioned that the recent surge in oil prices to record levels near $127 per barrel has yet to be felt at the consumer level.
    Ian Shepherdson, chief U.S. economist at High Frequency Economics, said that the weak economy was starting to show up in lower prices in some areas. He noted that the price of hotel rooms dropped for a third straight month, falling by 1.9 percent in April, a reflection of cutbacks in business and vacation travel.
    The Fed, fighting against a severe credit crunch and spreading economic weakness, has cut interest rates seven times since last September in an effort to keep the country from toppling into a recession.
    However, last month it signaled that it might take a pause in the rate cuts, with some Fed officials expressing worries that further reductions in interest rates could trigger unwanted inflation. The central bank is expected to keep rates unchanged when officials next meet June 24-26.
    So far this year, overall inflation is rising at an annual rate of 3 percent, down from a 4.1 percent increase for all of 2007. Core inflation, excluding energy and food, is up at an annual rate of 1.8 percent in the first four months of this year, compared with a 2.4 percent increase for all of 2007.
    Even with the slowdown in price increases so far this year, workers' wages are not keeping up. A separate Labor Department report showed that average weekly earnings for nonsupervisory workers dropped by 1 percent in April compared with a year ago, after adjusting for inflation. It was the seventh straight month that inflation-adjusted wages were down compared to a year ago.
    The combination of rising food and energy costs, weak wage gains and falling home prices have left households feeling squeezed, with consumer confidence readings plunging to recessionary levels.
    While many economists believe the country is in a recession, other analysts contend that the country may be able to avoid a full-blown downturn, especially if consumers spend a sizable portion of the 130 million economic stimulus payments that the government is now sending out.
    The overall surge in food prices of 0.9 percent was the largest one-month increase since food prices climbed 1.5 percent in January 1990.
    Gasoline prices, even with the decline in April, were 20.9 percent higher than a year ago.
    Clothing prices rose by 0.5 percent in April, even though discount stores reportedly engaged in heavy discounting in an effort to spur lagging sales.
    New car prices fell by 0.2 percent last month, reflecting the trouble automakers are having with sagging demand in the face of a weak economy and soaring gasoline costs. Airline ticket prices, which had been surging because of more expensive jet fuel, fell by 0.5 percent last month but are still up significantly from a year ago.
  2. Jonas Parker

    Jonas Parker Hooligan

    Saw this on Fox News this morning. Our political hacks in Washington must think that the American people are awfully stupid. I might even be insulted if I didn't consider the source.
  3. ghrit

    ghrit Ambulatory anachronism Administrator Founding Member

    I remain amazed at how rosy everything is when the numbers are "adjusted" for whatever they think needs to be ignored.
  4. RouteClearance

    RouteClearance Monkey+++ Site Supporter

    Adjusting the numbers(cooking the books) is illeagle in the private sector, when is the guvmint above the law? All this will do is to make the problem even worse, look at how hard Enron/World Com fell. Does our own "Unkle" think he can't implode the same disaterous way?
  5. Tango3

    Tango3 Aimless wanderer

    "flat readings for energy"??? impossible....
  6. overbore

    overbore Monkey++

    Help me out here, Friends, as I am stuck on logical: aren't dead people the only ones who do not eat and use energy????? For them, inflation is not a serious item but for the living, who do shop and do eat----[cow] P.T. Barnum said it best: "You can fool half the people all of the time but you can not fool all of the people all of the time". The question is how can you sort the political liars from the fools? Unfortunately, the answer is parallel to the final Viet Nam solution which also applies now to the Muslim extremists:

    Nuke all of the bad people, load the good ones on ships. Sink the ships. :lol:Strong opinion to follow----
  7. FalconDance

    FalconDance Neighborhood Witch

    It sort of reminds me of the electric company's figurings. Got last month's bill today and noticed that we are charged a (year-round) FAC which is a fuel adjustment charge, allegedly covering the "excess" energy sources they purchased last Jun-Nov to "provide service". It is, of course, allowed under the govt guidelines.

    Now, on June 1 thru Nov, our electric bills reflect an increase in rates to cover "excess" energy sources they purchase during those months in order to provide services. No matter how you look at it, that means the customers are being double freckin' charged!!!!!!!!!

    But the MO govt recently passed a bill allowing an illegally built plant by the company to stand even though it never had the proper permits (was actually denied). The company was fined several million dollars --- which, I bet, shows up in that damned FAC!
  8. Clyde

    Clyde Jet Set Tourer Administrator Founding Member

    all fees, expenses, taxes, inflation, etc, are passed on to the consumer in the form of higher prices.

    Make Life Better: Drink TIL the end!
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