Lower Oil, Gas Prices Keeping Inflation in Check; Jobless Claims Fall

[TheSarge]

WASHINGTON —  There is finally a little good news for consumers: Consumer prices were flat last month as a drop in costs for gasoline, clothes and new cars, helped to offset rising prices of food and medical care.

Meanwhile, new claims for jobless benefits dropped more than expected last week as the impact of two hurricanes in September faded.

The new reading on the Consumer Price Index, the government's most closely watched inflation barometer, came after prices actually dipped by 0.1 percent in August, the Labor Department reported Thursday.

Those two months, however, had offered Americans a rare reprieve. Consumer prices have marched upward most of the year, spiking by an eye popping 1.1 percent in June.

The toll of galloping prices for much of this year is eating into paychecks, further straining consumers who are pulling back sharply. Recent readings on retail sales were grim. The prospects that consumers will retrench further would spell more trouble for the already ailing economy.

Stripping out energy and food products, "core" prices inched up by just 0.1 percent in September, an improvement from a 0.2 percent advance in August.

The latest showing on inflation was better than economists expected. They were forecasting a 0.1 percent increase in overall prices and a 0.2 percent rise minus energy and food.

In addition, the Labor Department says initial claims for unemployment insurance last week fell 16,000 to a seasonally adjusted level of 461,000. That's below analysts' expectations of 475,000.

http://www.foxnews.com/story/0,2933,438822,00.html

[NHSparky]

400K is usually the benchmark of a healthy economy.  Once we're below 400,000 new jobless claims in a week, we'll be in good shape, or at least a long way towards it.

[Chris_]

Saw a story on the local news a few nights ago.  They had an "on the scene" reporter talking about the falling gas prices.  He interviewed serveral people and went on to explain how falling gas prices is bad for the economy.  It was all doom 'n gloom, but everyone he interviewed was upbeat and pleased with the falling prices.

[NHSparky]

Saw a story on the local news a few nights ago.  They had an "on the scene" reporter talking about the falling gas prices.  He interviewed serveral people and went on to explain how falling gas prices is bad for the economy.  It was all doom 'n gloom, but everyone he interviewed was upbeat and pleased with the falling prices.

Waitda****upaminute...rising gas prices are bad, and so are falling gas prices?  AYFKM?

[Chris_]

Waitda****upaminute...rising gas prices are bad, and so are falling gas prices?  AYFKM?

Yes, it was a true WTF moment.   

[TheSarge]

Waitda****upaminute...rising gas prices are bad, and so are falling gas prices?  AYFKM?

C'mon Sparky you and lug should know by now that anything that might even hint at something good for the Country when a Republican is in office will immediately get portrayed on the news as a bad thing.

It's part of that subtle subliminal BS they to.

[Wineslob]

I'd say the "reporter" was pulling notes from the MSN front page.

[USA4ME]

For fun, let's say Hussein isn't lying (    ) and really intends on lowering the taxes of the middle class.  He says he wants to do it in order to give them more money to spend as they see fit in order to get the economy rolling along.

What happens when oil prices go back up, and in turn, gas prices go back to $4/gal?

Doesn't matter if their taxes are lower or not, gas prices go back up and people are going to cut back on unnecessary spending.  Same reaction if food prices go up.  Retail and large ticket items sales will go down, jobs will be cut, money will flee the stock market on declining sales, and even less income into the the treasury will ensue.  Even if people with capital weren't worried that they were going to invest money in industires and businesses of which Hussein either won't attack as greedy and/or try to nationalize, why should they since there aren't enough people who are willing to buy the products and services?

Oil prices are going to play an even larger part in the economy in the next few years than it ever has in the past.  Hussein is under the impression that as a messiah he will magically talk to OPEC, etc... and get them to cooperate.  If Bush, being someone and having an administration that was familiar with the oil industry and how it works, wasn't able to keep prices down, then there's no way a bunch of Dem/libs who know nothing about business, much less the oil business, can do anything at all to stop the rise.

So when I look at Hussein, there's quite a bit about him to be concerned, but this is one of the key one's to me.

.

[Baruch Menachem]

Interesting side light to how  oil prices affect other things... One of the local free papers had a map of foreclosures in the county by zip code. The greater the distance from downtown, the higher the foreclosure rate.  In other words, people were paying for gas right now, and letting their house payments slide as they needed to get to work.  Gas prices are about 1.25 less a gallon than they were in august, so maybe we will see less of a housing crisis as people can meet their budgets again.

I commute at an early hour, so I hadn't seen this, but the county has been reporting huge increases in the amount of bike traffic. I didn't believe it, because I wasn't seeing that much of an increase myself.  But I had to go during regular commute hours a week ago, and there was a traffic jam in the bike lane going across the Hawthorne bridge.... in October.  So people are changing behavior.    And the building where I work has increased its bike spaces by 1/2, and the new spaces are all filled, even in October.

So we are seeing permanent changes in behavior.   I think core rents are going to increase a lot.  But I think there have been enough changes that gas prices are going to sink a bit more, as people continue to drive less.   

I think people have really improved their balance sheets over the last six months, and  that improvement will continue.

[Chris_]

Of course, Bush will get the credit. since he got the blame for when gas prices spiked.

Right?

Hello, MSM?

*crickets*