ANALYSIS, COMMENTS, THOUGHTS, AND OTHER OBSERVATIONS IN DR. SKOSPLES' NATIONAL INCOME AND BUSINESS CYCLES COURSE AT OHIO WESLEYAN UNIVERSITY
Sunday, September 19, 2010
Consumer Prices Rise 0.3 Percent in August
This article goes along with the other article I posted. Consumer prices raised 0.3 percent in August and this excludes food and energy- hence the term Core Inflation. Within the economy, the sluggish demand of overall goods is preventing businesses from raising prices and the high Unemployment Rates are keeping a lid on wage pressures. Core inflation is also up only 0.9 percent which is matching the lowest 12 month gain in 44 years. Furthermore, this article talks about how the Federal Reserve is keeping Interest Rates at record lows for nearly two years in an effort to try and jump start the economy. Does this implementation they issued seem like a good way to jump start the economy? Lastly, the article foreshadows how the economy now could be in fear of facing deflation.
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Last month the Fed voted to use the proceeds from its mortgage bonds to buy long-term Treasuries to revive the economy. But despite the measures being taken by the Fed, inflation is below the implicit goal of 2 percent raising concerns of possible deflation due to falling wages and prices.
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