January 2009
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Consumer Price Index Sets New Record
January 1, 2009
The U.S economy was headed for 12.9% annualized inflation rate, 1970’s style inflation, then dropped into a deflationary spiral measured at an annualized rate of -18.4%, 1930’s style, see chart. The deflationary cycle that began in August 2008 was the first drop in CPI since July of 1990. That means our streak of 216 straight months of growth, over eighteen years has come to a dramatic end.
Spending Way Down
January 1, 2009
The December numbers are not available yet however, all indications are that consumer spending will be down in December as well. Consumer spending dropped 0.6% in November from October in spite of deep discounting and falling prices. Savings rates have increased with consumers anticipating the coming rainy day. U.S. workers, meanwhile, filed 30,000 new claims for state unemployment benefits last week.
Deflation Hits the US Economy
January 1, 2009
This violent up and down movement has jarred the economy at its core moving us into an unfamiliar economic territory. “Falling Prices (other than oil products) may seem like a positive turn. It is not. Deflation feeds on itself and in a fairly short order can hurt a nation faster than inflation. Most people don’t know that because we have not seen prolonged deflation since the 1930’s”.
Law Firms Not Immune
December 29, 2008
Heller Ehrman LLP, San Francisco-based law firm which at one time was one of Seattle’s largest law firms filed for Chapter 11 bankruptcy protection. On December 28, 2008 in the U.S. District Court for the Northern District of California.
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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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