|
Posted by Steven L. on January 16, 2008, 11:19 am
Inflation Rate Is Worst in 17 Years
Wednesday January 16, 10:40 am ET
By Martin Crutsinger, AP Economics Writer
Higher Costs for Energy and Food Push Inflation Rate Up by Largest
Amount in 17 Years
WASHINGTON (AP) -- Higher costs for energy and food last year pushed
inflation up by the largest amount in 17 years, even though prices
generally remained tame outside of those two areas. Meanwhile,
industrial output was flat in December, more evidence of a significant
slowdown in the economy.
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.
The unchanged output in December was the poorest showing since
industrial output actually fell by 0.5 percent in October. Output had
been up by 0.3 percent in November.
The December weakness reflected flat output at U.S. factories, a tiny
0.1 percent rise in the mining industry and a 0.2 percent drop at the
nation's utilities.
The Consumer Price Index rose by 0.3 percent in December, slower than
the 0.8 percent in November, as food costs were flat for the month and
energy prices rose by 0.9 percent after an even bigger 5.7 percent jump
in November.
Outside of food and energy, inflation rose a more moderate 0.2 percent
in December. This measure of core inflation rose by 2.4 percent for all
of 2007, down slightly from a 2.6 percent increase in 2006.
The Federal Reserve is closely watching to see whether the jump in food
and energy becomes more widespread and starts pushing core inflation
higher....
The CPI report showed that the 4.1 percent increase in overall prices
was the biggest since a 6.1 percent jump in prices in 1990.
Energy costs rose by 17.4 percent this past year while food costs rose
by 4.9 percent. Both were the biggest increases since 1990. Gasoline
prices were up 29.6 percent, the biggest increase since they soared by
30.1 percent in 1999.
The 2.4 percent rise in prices outside of food and energy was the
smallest since a 2.2 percent rise in 2005.
Clothing costs and the price of new cars actually fell for the year,
both dropping by 0.3 percent, while airline fares, reflecting higher
fuel costs, were up 10.6 percent and medical care, always one of the
leading areas of price increases, rose by 5.2 percent for 2007.
Workers' wages failed to keep up with the higher inflation. Average
weekly earnings, after adjusting for inflation, dropped by 0.9 percent
in 2007, the biggest setback since a 1.5 percent fall in 2005.
http://biz.yahoo.com/ap/080116/economy.html
[
My take:
You'll notice that inflation has increased, despite evidence of an
incipient recession. That's stagflation, all right.
I'm going to hold on to GOLDX and MIDSX for the present. I won't add to
my positions though.
]
--
Steven L.
Email: sdlitvin@earthlinkNOSPAM.net
Remove the NOSPAM before replying to me.
|
| Similar Threads | Posted | | Commercial Building Lease Rate Inflation - Investment or Not? | September 11, 2007, 1:51 pm |
| Worst Financial Advice of March 2008 | March 17, 2008, 2:47 pm |
| Gold drops to end worst month since 1983 | November 1, 2008, 8:17 pm |
| Inflation play | August 18, 2006, 10:32 pm |
| Re: Has the inflation damage already been done? | July 27, 2008, 4:02 pm |
| Inflation-protected securities | November 27, 2007, 8:23 am |
| Re: Importing inflation the next worry for USA | May 12, 2006, 12:29 am |
| Re: Importing inflation the next worry for USA | May 12, 2006, 10:07 am |
| Re: Importing inflation the next worry for USA | May 12, 2006, 11:54 am |
| Re: Importing inflation the next worry for USA | May 12, 2006, 12:09 pm |
|
|
Yahoo! 
Google 
Windows Live 
del.icio.us 
digg 
Netscape 
XML Sitemap