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Economy |
Don't Look Now, But Stagflation May Be Here |
2011-06-17 |
Stubbornly high unemployment has been the bane of this economic recovery. Inflation has been creeping higher for months. And on Wednesday, data tied to a key manufacturing index was disappointing, to say the least. All of this turmoil has kicked up the volume on warnings that the U.S. is headed into a period of stagflation, a dreaded economic condition marked by sharply rising consumer prices accompanied by miniscule growth. Consider what that would mean to the average consumer who has to pay more for everything from a gallon of milk to a new car, but can't expect a raise any time soon because his company is just getting by. And that's assuming that the consumer has a job at all. "To me the definition of stagflation is rising prices while there's a soft labor market. If those conditions were mutually exclusive we wouldn't have the word stagflation," said Larry Elkin, president of Palisades Hudson Financial Group, a financial planning and investment management firm in Scarsdale, N.Y. Here are the numbers, just from today, that have reignited talk of stagflation: the Consumer Price Index, a widely watched inflationary gauge, rose 0.2% on a month-over-month basis. Economists had predicted the index would rise 0.1%. Minus food and energy prices, which are viewed as more volatile than the costs of other consumer goods, the index was up 0.3% compared with expectations of 0.2%. And year over year, overall inflation jumped 3.6%, while core inflation (minus food and energy) was up 1.5%. Economists had predicted 3.4% for overall inflation and 1.4% for core inflation. So inflation numbers came in higher-than-expected across-the-board. At the same time, the Empire State manufacturing index for June was an eye-opener. The index came in at -7.8 versus expectations of 12. On top of it all, throw in unemployment, which jumped back over 9% in May. "This is what a mild case of stagflation looks like, and it doesn't look very good," Elkin said. Oh boy! Summer of Wreckovery II is well underway I see! |
Posted by:DarthVader |
#4 Lest we fergit, FREEREPUBLIC [old] > US GOVT. HAS US$61.6TRILYUHN IN UNFUNDED MANDATES. and * DRUDGEREPORT/FREEREPUBLIC [old] > CARVILLE: 2012 COULD BE VERY ROUGH; [US]CIVIL UNREST "IMMINENTLY POSSIBLE". "Butter-N-Eggs", Jobs matter more to the American voter + mainstream than killing Osama or anybody similar. versus * CHINESE MILITARY FORUM > GREENSPAN: GREEK DEFAULT "ALMOST CERTAIN" [imminent?], COULD CAUSE DOUBLE-DIP [US Recession]. * DEFENCE.PK/FORUMS > GREEK DEBT OF EU$330.0BILYUHN MAY BECOME EUROPE'S enduring = destructive?]SINKHOLE. ARTIC = By Year 2014-15, Greece may need another EU$170.0Bilyuhn. |
Posted by: JosephMendiola 2011-06-17 23:29 |
#3 The Misery Index is the highest in 28 years! It took a big jump after 2008. |
Posted by: JohnQC 2011-06-17 15:08 |
#2 not to fear - VP Joe Biden (D-Slow) is in charge of teh economic turnaround. What could go wrong? |
Posted by: Frank G 2011-06-17 14:38 |
#1 Haven't heard that term since the days of jimmuh carter. Malaise must be just around the corner. |
Posted by: Abu Uluque 2011-06-17 13:55 |