February 21 2008 Release

February 21 2008 Release - CPI this time as released before...

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February 21, 2008 Economics Release: Consumer Price Index: January 2008 The Consumer Price Index for All Urban Consumers (CPI-U) increased .5 percent in January A lot of people are saying and believing that we have clearer evidence of stagflation. Stagflation- situation where you have a slowing econ activity combined with increasing inflation rate. o Last time this happened was 1970s. o Important because it’s a policymakers worst nightmare o To fight stagflation, need to increase interest rates but this would slow down economy. o Fighting stagflation makes economy worse o If Fed lowers interest rate, could increase inflation rate Fed has been lowering interest rates and their bias is for further economic weakening Fed believes that inflation will moderate (not increase that much)
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Unformatted text preview: CPI this time as released before PPI All items increased by .4 percent The core increased by .3 Unadjusted- 4.3% If this is the start of the trend, it will be interesting to see how the Fed reacts Economics Release: Initial Claims 4 week Moving Average Now its above 350,000 A lot of variation Low point was in May Small upward trend of the graph Labor Market is slowing down At 360,500 right now Expect to be closer to 350,000 next week The last 3 weeks, we have seen a definite uptake in the number of people continuing to file for unemployment insurance Total Number has increased by over 80,000 o Last time this happened there was a huge drop in jobs...
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This note was uploaded on 04/07/2008 for the course ECON 2035 taught by Professor Stahl during the Spring '08 term at LSU.

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February 21 2008 Release - CPI this time as released before...

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