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

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.

bolo, it is not like when you flush another trillion dollars into the economy that THE NEXT DAY items at Wal Mart that were priced at 3.07 suddenly jump to five dollars.

It takes time, but inflation will INEVITABLY be the result of the federal reserve’s policies.

Just because you don’t understand economics doesn’t mean that the laws of monetary supply have been suspended.

We are in for a repeat of the 70’s no matter who is in the oval office for the next four years....., I only hope there is another Volcker/Reagan combination out there at the end of it.

Sorry, bolo.

Long long long time lurker. I find it frustrating that many conservatives believe that supporting what is clearly a profligate fed is ok, as long as Bush is doing it, and fail to recognize the seeds of our economic destruction.

You would think that on a board like this, ALL comments like yours would be clearly recognized as sarcastic.

Yet I have seen folks who would NEVER vote Obama rant on and on about the economy being the fault of “greedy ceos” on Wall Street, mock sound money policies, refuse to acknowledge that stretching our military around the globe has costs, and support Bush, whose economic policies can in no kinda way be called “conservative” but will go down in history as bankrupting the USA..., or at least setting us on the path. I just thought you were one of them. It is not like they are a rarity today.

I am sorry, though. I am clearly the dense one here. Apologies proffered.

I told my wife last night that Obama’s wealth redistribution plans were going to hurt everyone. You give someone earning $30,000 a “tax cut” in the form of a $500 check (when in fact they pay no taxes) all you are doing is increasing inflation.

Low income earners often know only one thing: spend. When more people are spending, demand increases. When demand increases, prices increase. So add that to your inflationary pressures.

Soon Obama’s “tax cut” will nullify itself as the extra cash handed out is worth less.

Money supply growth, BEFORE the bailout of AIG/Stimulus pack/loan ot automakers and bailout of bear sterns, was 15% a year. Now it is going to be like a 20-25% AT MINIMUM growth in money supply. Now you may ask “how do you know that?” and it would be a GOOD question, because the liars in DC have conveniently QUIT PUBLISHING THE M3 MONEY SUPPLY FIGURES. However, there is an MZ figure that we can use to approximate it. Further, the scumsucking lying swindling government (yes that is OUR government, the Bush Republicans..., the so called “conservatives”) has been lying to you on the rate of inflation. The CPI (consumer price index) says we have less than three per cent inflation. Of course, they remove housing, fuel and food costs from that index, which combine about 70 per cent or more of out disposable income!!!! Real rates of inflation are already at about 8-10 per cent (again, the CPI numbers are manipulative lies).

The fun really starts when Obama takes office, with promises to throw money at any and everything, and the sure fire economy killing prospect of higher taxes to fund the socialist pipe dreams they are just itching to put in place.

However, do not be decieved. Just with the present republican chicanery, we are good for a 10-15% inflation per year ramp up over then next 4-5 years As long as there is a lying, inflationary, money vomiting fed, you are going to continue to see inflation at a rate fo at least 1% a year (the average rate of inflation since the beginning of the fed in 1913, which has destroyed over 96% of the purchasing power of the dollar since that time).

The problem is that Keynseians believe that inflation and recession are mutually exclusive. They believe this nonsense despite the awful 70’s when we actually coined a phrase for the two “stagflation.” So people are happy when we have slower growth, and they publish cute little meaningless statistics about the CPI (where again, the main components of peoples spending necessities are excluded).

Actually, you are going to see much much much higher rates of inflation. All these “market rescue tactics are being done with MONEY WE DON’T HAVE! They are just printing it up and slinging it out there. This does not even take into account the socialist Obama.

That is why, although I wish I could believe your rosy scenario of 5-10-20 years out, I think I had rather believe in elves and magic princesses.

Buy gold. Buy silver.

I live on a fixed income. I have not had a raise at my job in the last 5 years. We are careful with our funds and made a good down payment on our house. In these last five years if inflation was approaching fifteen percent, my income would essentially have been halved. I find us going out to eat more and more often. I also have purchased many more toys recently than in the past. I know these arguments are simplistic but the main inflationary engine ,the price of petroleum, has derailed. I see a lot of deflationary pressures around us. As long as people and businesses are hording money to improve their balance sheets inflation will stay in check. When people really start spending their saved money only then will the effect of the increased money supply be inflationary. But I can see financial institutions being very conservative in the next at least five years. And personally I'm taking Dave Ramsey's advice and we will strive to pay off our house. I think a lot of people will do the same.If the American worker maintains his increased productivity then this will have a tendency to mitigate inflationary pressures. So ,also, will any increase in petroleum production and any alternative fuels. The money made (probably a lot of it illegally) on wall street was extremely inflationary because it allowed massive amounts of “unearned” money into the system. And, gold may be a good hedge, but , not right now.

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