RedBull
08-05-2008, 04:53 AM
Inflation jumps 0.8% in June
2nd-biggest monthly jump since '81AN ECONOMY ON THE ROPES
Tuesday, August 05, 2008
At least we're not in Zimbabwe, where inflation is estimated by private economists to be 15 million percent.
For consumers here, it only feels that bad.
"Everything's going up, food, gas, the things that are essential to living," Bill Rimmel, 67, of Schenley Heights, said while standing next to a cart full of groceries.
Yesterday, the Commerce Department released a report that consumer inflation rose by 0.8 percent in June, hitting an annualized rate of 5.02 percent. It was the second biggest monthly increase since 1981. In September 2005, the gauge rose 1 percent after Hurricane Katrina shut down Gulf Coast oil facilities and sent energy prices soaring.
Mr. Rimmel had taken his mother, Ruth Smith, 88, of the Hill District, to the Giant Eagle on the South Side. Those economic stimulus checks they each received from the federal government were just a memory yesterday. Mr. Rimmel said his check went to paying for his gas and electric bills -- and even then it didn't pay them off. His mother said she took her check and "put it right on my gas bill."
Yolonda McKenzie, 28, of Mount Oliver, had her three young children out in the sun and instead of buying juice for them, which is what she wanted to do because it would be more nutritious, she bought a cheaper orange drink. "This was 75 cents," she said, pointing to the single-serving plastic container.
The stimulus money, she said, is gone.
"That was gone before I got it," she said.
Consumer spending was up 0.8 percent in May and 0.6 percent in June, the Commerce Department said. Those increases were slashed to a modest 0.3 percent increase in May and a drop of 0.2 percent in June, however, when adjusted for rising prices of gasoline, food and other products. Incomes rose just 0.1 percent.
The inflation rate, if it does hold at a 5 percent average for this year, still will be less than the 13.58 percent that it was during the 1980 presidential election, when Ronald Reagan used rising prices to beat Jimmy Carter.
Mr. Rimmel remembers those days, but he said the country is in worse shape now. The economy and the war in Iraq, he said, are "really straining our nation."
Rising prices were spurred by the huge increase in gasoline costs, which locally had cost $2.87 a gallon just a year ago and hit a high of $4.05 last month, according to the AAA Fuel Gauge Report. Regular unleaded was back down to $3.88 a gallon yesterday.
The Dow, Standard and Poor's 500 and Nasdaq Indexes all closed down from where trading opened yesterday by .37 percent, 0.9 percent and 1.1 percent respectively.
The Federal Reserve, which is meeting today, is projected to hold the benchmark rate unchanged at 2 percent as the risks of both faster inflation and slower growth mount.
"The rebates appear to have boosted spending, but the boost starts to fade fairly soon," James O'Sullivan, senior economist at UBS Securities LLC in Stamford, Conn., said before the report.
The Treasury Department completed the mass distribution of the stimulus payments in the week ending July 11, sending out 112 million payments totaling $91.8 billion. Payments will continue in smaller batches to households who file returns in coming months.
Nationally the savings rates dropped as a percent of after-tax incomes to 2.5 percent in June from 4.9 percent in May.
In other economic news, the Commerce Department reported that orders to U.S. factories shot up by 1.7 percent in June, the fastest pace in six months, reflecting big increases in petroleum prices and heavy demand for military equipment.
Ms. McKenzie said she is now shopping sales, buying store brands and hunting for bargains to support her family. She is receiving unemployment from her former job as a nurses aide and is pregnant with a fourth child, due this month
By Ann Belser, Post-Gazette (http://post-gazette.com/pg/08218/901861-28.stm)
2nd-biggest monthly jump since '81AN ECONOMY ON THE ROPES
Tuesday, August 05, 2008
At least we're not in Zimbabwe, where inflation is estimated by private economists to be 15 million percent.
For consumers here, it only feels that bad.
"Everything's going up, food, gas, the things that are essential to living," Bill Rimmel, 67, of Schenley Heights, said while standing next to a cart full of groceries.
Yesterday, the Commerce Department released a report that consumer inflation rose by 0.8 percent in June, hitting an annualized rate of 5.02 percent. It was the second biggest monthly increase since 1981. In September 2005, the gauge rose 1 percent after Hurricane Katrina shut down Gulf Coast oil facilities and sent energy prices soaring.
Mr. Rimmel had taken his mother, Ruth Smith, 88, of the Hill District, to the Giant Eagle on the South Side. Those economic stimulus checks they each received from the federal government were just a memory yesterday. Mr. Rimmel said his check went to paying for his gas and electric bills -- and even then it didn't pay them off. His mother said she took her check and "put it right on my gas bill."
Yolonda McKenzie, 28, of Mount Oliver, had her three young children out in the sun and instead of buying juice for them, which is what she wanted to do because it would be more nutritious, she bought a cheaper orange drink. "This was 75 cents," she said, pointing to the single-serving plastic container.
The stimulus money, she said, is gone.
"That was gone before I got it," she said.
Consumer spending was up 0.8 percent in May and 0.6 percent in June, the Commerce Department said. Those increases were slashed to a modest 0.3 percent increase in May and a drop of 0.2 percent in June, however, when adjusted for rising prices of gasoline, food and other products. Incomes rose just 0.1 percent.
The inflation rate, if it does hold at a 5 percent average for this year, still will be less than the 13.58 percent that it was during the 1980 presidential election, when Ronald Reagan used rising prices to beat Jimmy Carter.
Mr. Rimmel remembers those days, but he said the country is in worse shape now. The economy and the war in Iraq, he said, are "really straining our nation."
Rising prices were spurred by the huge increase in gasoline costs, which locally had cost $2.87 a gallon just a year ago and hit a high of $4.05 last month, according to the AAA Fuel Gauge Report. Regular unleaded was back down to $3.88 a gallon yesterday.
The Dow, Standard and Poor's 500 and Nasdaq Indexes all closed down from where trading opened yesterday by .37 percent, 0.9 percent and 1.1 percent respectively.
The Federal Reserve, which is meeting today, is projected to hold the benchmark rate unchanged at 2 percent as the risks of both faster inflation and slower growth mount.
"The rebates appear to have boosted spending, but the boost starts to fade fairly soon," James O'Sullivan, senior economist at UBS Securities LLC in Stamford, Conn., said before the report.
The Treasury Department completed the mass distribution of the stimulus payments in the week ending July 11, sending out 112 million payments totaling $91.8 billion. Payments will continue in smaller batches to households who file returns in coming months.
Nationally the savings rates dropped as a percent of after-tax incomes to 2.5 percent in June from 4.9 percent in May.
In other economic news, the Commerce Department reported that orders to U.S. factories shot up by 1.7 percent in June, the fastest pace in six months, reflecting big increases in petroleum prices and heavy demand for military equipment.
Ms. McKenzie said she is now shopping sales, buying store brands and hunting for bargains to support her family. She is receiving unemployment from her former job as a nurses aide and is pregnant with a fourth child, due this month
By Ann Belser, Post-Gazette (http://post-gazette.com/pg/08218/901861-28.stm)