Economic Summary
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CPI Up Slightly
April 5, 2009
The U.S. Consumer Price Index (CPI) posted a .39% increase in the month of February and has increased a total of .67% so far this year. At this rate we could expect it to increase on an annual basis of 4%. CPI is a key indicator of inflation. The Federal Reserve increased the money supply to stem a deflationary cycle, which it appears to have accomplished. The question; can they successfully slow inflation if it starts to get out of hand?
Personal Income Declines
April 5, 2009
After an increase due to pay raises for federal government employees Personal Income dropped in February. The chart below illustrates the growth in personal income between recessions, pink band.
Unemployment Rate Up 11%
April 5, 2009
The U.S. Unemployment Rate increased to 8.1% in the month of February. The chart below tracks Unemployment from 1981, pink band indicates recessions, which peaked at 10.3% in February of 1983. The chart indicates that Unemployment continues to rise approximately two quarters after the end of a recession. If the current recession ends in the fourth quarter of this year Unemployment, based on history, will continue to increase into the middle of 2010. Watch and see what happens.
Oil Prices Up 23%
April 5, 2009
The price of West Texas Crude remains increased to $48 per barrel in March 2009 a 23% increase over February. The price is headed for a range better suited for producers or the $60 to $75 per barrel range. Oil of gas price is a key component of CPI. The increase in crude oil prices will push March’s CPI numbers up.
U.S. GDP Historically High
April 5, 2009
The fourth quarter GDP dropped 1.6% from the third quarter. The chart below, pink indicates recessions; shows U.S. GDP over the entire life of the index, starting in 1947. Notice the slight flattening or drops in GDP during recessions. This chart is illustrates the power of U.S. economy, which has been and will continue to be a dominate economic force.
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Business/News & Views® / by David. W. Weatherholt
ISBN: 978-0-9823041-1-2 (electronic format)
Published in the United States of America through www.waconsult.com
Published in an electronic format by Weatherholt & Associates, LLC
First Trade Publishing: October 2008
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