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Customer inflation slows economic recovery

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Posted by NaldS on 2011/6/28 3:24:12 (4159 reads)
User Diaries

A small boost in national consumer costs nearly covered up the truth that manufacturing and confidence are in the gutter. The United States economic recovery moves similar to a zombie now, and is just as peppy. This results in an enjoyable time with consumer inflation. It makes the cost of personal loans go up a lot.

How the Consumer Price Index has changed recently

Russell Price, an Ameriprise Financial senior economist, explained that nobody wants to hear the reason for the decline in production and low confidence.


"Both of them are reflective of the slowdown in the economy that we have experienced over the last few months," he said.

One year ago, the consumer price index was up 3.6 percent compared to April's 0.4 percent and May's 0.2 percent, according to the U.S. Department of Labor. The Bureau of Labor Statistics report that May's under-performance is the lowest that it has been since it was in November.

It does not help that there was an increase in food costs. It went up 0.4 percent. One economist pointed out a decrease in the United States energy index last month, oddly enough. It went down a percentage point. Even more interesting was the gas decrease. It went up 2 percent in the U.S. Even with the change, food prices rose just the same. They weren't changing.

Clothing, shelter and automobiles getting more expensive

The Consumer Price Index report had more to say concerning price acceleration. There was not a change in demand, although other things still went up in price in May, reports the New York Times. This involves residence, car costs, recreation and new clothing. Last month, there was a decrease in a few items including sot-weed tobacco. Alco involved were personal care items and airline prices.

Conditions 'deteriorated'

It is interesting to note the choice of words the Times uses when discussing production. According to the New York Federal Reserve, conditions for manufacturers have deteriorated so far in June, marked by a 20-point drop in the manufacturing industry's conditions index to minus-7.8 points, the first dip below zero since Nov 2010. The decline expected was supposed to end at positive 14.

Due to the Japanese catastrophe that occurred, some of the production performance was changed a bit.

"It affects just about every region," said Price. "In the manufacturing report, the component shortages were the No. 1 factor, and then the broader softening that went along with the higher gasoline prices."

The cost of a watermelon

Information from

Consumer Price Index

New York Federal Reserve

New York Times

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