Inflation/Economy

[Galaxy]

Reading the paper this morning, inflation (which is not unknown or anything) was pegged at 4.3%. Do you think it will slow down, and what do you think this will do to the economy and wealth of the country?

[gstelmack]

How much of that is gas prices skyrocketing?

[Farrah Whitworth-Rahn]

I think that includes the cost of energy. I thought I read somewhere that the core rate was only up .6%.

[flere-imsaho]

Originally Posted by Farrah Whitworth-Rahn

I think that includes the cost of energy. I thought I read somewhere that the core rate was only up .6%.

The core rate, which excludes food & energy, jumped .6%, which is a "large" jump, apparently. Still, energy is pushing the inflation numbers, but "experts" apparently see that moderating in the coming months.

Inflation's not a problem, per se, if the economy heats up along with it (i.e. people can afford the higher prices because they're making more money, or at least making money). However, I'm not sure that it's clear that the economy is "heating up" in any sense of that phrase.

Equally disturbing have been the drops in mortgage applications and new home starts. A pullback in that sector would have enormous ramifications.

[henry296]

Although some of the analysts comments on the home starts is that it is weather based. Here on the east coast it was a very wet March. They said new home permits were pretty stable.

[Flasch186]

Originally Posted by flere-imsaho

The core rate, which excludes food & energy, jumped .6%, which is a "large" jump, apparently. Still, energy is pushing the inflation numbers, but "experts" apparently see that moderating in the coming months.

Inflation's not a problem, per se, if the economy heats up along with it (i.e. people can afford the higher prices because they're making more money, or at least making money). However, I'm not sure that it's clear that the economy is "heating up" in any sense of that phrase.

Equally disturbing have been the drops in mortgage applications and new home starts. A pullback in that sector would have enormous ramifications.

I am seeing a tightening up around here and this market is in a real estate BOOM. As long as rates stay low people will continue to buy houses.

Another scary thing is the lack of payroll jobs, everyone was telling me we'd see much larger growth and instead from what Ive seen they are about the same +/- as they were at the beginning of the year PLUS the consumer confidence has slipped too. I keep waiting for those jobs Greenspan and Bush said would be coming but unless you make your own (I hear the Minutemen have stopped accepting applications) you better get used to those illegal imm....what? oh sorry...undocumented worke....what? oh....citizens in purgatory continuing to take those jobs "you lazy americans wont do".