posted on May 15, 2003 07:55:40 AM new
Wholesale prices in the US fell in April at the fastest pace on record, according to official figures released on Thursday.
The drop was significantly affected by recent declines in oil prices, but even after excluding food and energy, the decline was the biggest in almost a decade.
The Labor Department said its producer price index fell 1.9 per cent more than expected. Excluding food and energy prices, it was down 0.9 per cent, the biggest drop since August 1993.
The report appeared likely to fan more debate about the risks of deflation. It followed reports on Wednesday showing the biggest decline on record in import prices and drops in retail sales.
In positive news, the Labor Department also said that new unemployment insurance claims fell sharply last week, for the second consecutive week, but remained above the 400,000 level generally associated with a shrinking job market.
Ian Sheperdson, an economist with High Frequency Economics, cautioned that excluding food, energy, autos and tobacco prices, the PPI rose by 0.2 per cent."Ths report is NOT indicative of deflation - the drop in claims and higher business optimism are much more important," he said.
Federal Reserve policymakers, in their last official statement, acknowledged "the probability of an unwelcome substantial fall in inflation". They dismissed it as "minor", but acknowledged that the odds were stronger than that of a pickup.
Is it just me or does the statement in bold above seem ridiculous ? I mean, if food, energy, and auto prices are going down, then what significant consumer good(s) are going up in price that would overcome prices falling in these other sectors ? Clothing? Pet food ? The only items that are going up in price are medical care and college tuition, which were expensive even during the last Depression.
posted on May 16, 2003 04:11:10 PM new
how about houses??
i live in a big city and i can tell you what is going on around me,people dont keep their dental appointment,dont cut their hair as often,dye their hair only when they have the money,i saw a lady with long hair just want it cut and go home to dry it herself.
more people are mowing their own lawn.
there used to be a line at the local supermarket special meat and fish counter,now there is hardly any one .
prices are not firm,i dont know how much your wife pays for a cut and hairdye,but here you can have one for 55 dollars.
or the vietnamese will cut your hair for 2.99.
tips,forget about tips,they should be happy you patronise their business.
i find a lot of things at our local dollar store,how about you??
it is real,prices are falling.
posted on May 16, 2003 04:15:40 PM new
Houses may be the next shoe to fall. Housing starts fell off last month when they were expected to go up. Although there is a lot of pent up demand for housing purchases being released as interest rates fall, that demand also has limits.
posted on May 16, 2003 07:36:52 PM new
NW prices are sky high -you have boeing,msft,amzn,intuit etc.
what about silicon valley??
now on tv they are showing a college grad picking up dog poops as a full time job.i bet pay is decent.sorry,it is more than one person,it is an organisation employing several college grads
posted on May 16, 2003 08:11:57 PM new
What are you talking about SW? Boeing is laying off and MS only effects Seattle area. But over all the artificial inflation of the past is catching up, in the Portland area housing prices are coming down and rents have leveled off.
Wages have also been cut here in the area as employers have a wide choice of applicants to choose from.
posted on May 17, 2003 10:05:39 AM new
In the mid-west rents are going down and in many cases negotiable due to how cheap it is to buy a house at these interest rates. Many renters are becoming buyers and their monthly mortgage is as cheap as their rent payment.
