[Grovenet] Are you better off ? ? ? ?

Tue Jan 15 10:55:30 PST 2008

And what's the  answer? 

Large cuts in interest rates that will  make it easier for consumers to go
deeper into debt buying stuff!!

When did our formula for economic stability stop being "earn money, pay off
debts" and become "borrow money, buy stuff"???

Ron D'Eau Claire

-----Original Message-----
From: grovenet-bounces at rdrop.com [mailto:grovenet-bounces at rdrop.com] On
Behalf Of Bob Browning
Sent: Tuesday, January 15, 2008 9:09 AM
To: Grovenet
Subject: [Grovenet] Are you better off ? ? ? ?

Are you now better off than you were 7 years ago when the Rs took the
Presidency?? It really reminds me of 1980, when we really started to pay for
Lyndon Johnson's "guns and butter"!!

bob "remember, it's the little guy who pays the price of inflation" browning

***********************************************

Wholesale prices soared last year 

By MARTIN CRUTSINGER, AP Economics Writer1 hour, 18 minutes ago 

Wholesale inflation last year shot up by the largest amount in 26 years
while retailers suffered their worst December shopping season in five years
as mounting economic woes caused consumers to put away their wallets.

The Labor Department reported that wholesale inflation was up 6.3 percent
for all of 2007, reflecting a huge increase for the year in various types of
energy costs ranging from gasoline to home heating oil.

Meanwhile, retail sales fell by 0.4 percent in December, the worst showing
in six months, the Commerce Department reported. Consumer confidence has
plunged, reflecting the worsening housing slump and a lingering credit
crisis.

In a third report, the government said that inventories held by businesses
rose by 0.4 percent in November, reflecting big increases in stockpiles held
by manufacturers and wholesalers. The 0.4 percent rise matched a similar
increase in September and was in line with expectations. Inventories had
risen by a much smaller 0.1 percent in October.

The poor showing for retail sales and a disappointing quarterly report from
Citigroup Inc. renewed recession worries on Wall Street. In early morning
trading, the Dow Jones industrial average was down more than 100 points.

"Consumers held tight to their wallets in December, raising questions about
whether household spending will be enough to keep us out of a recession,"
said Joel Naroff, chief economist at Naroff Economic Advisors.

For inflation, the year ended on a more positive note with wholesale prices
falling by 0.1 percent in December. That reflected decreasing costs last
month for gasoline and other energy products. It was a significant slowdown
after prices had soared by 3.2 percent in November, which had been the
biggest one-month increase in 34 years.

The combination of rising inflation pressures and a weak economy represent a
dilemma for the Federal Reserve over whether to cut rates to boost economic
growth even at the risk of making inflation worse.

Federal Reserve Chairman Ben Bernanke last week sent a strong signal that
the Fed is more worried at the moment about weak growth than inflation -
given a series of weaker-than-expected data in recent weeks. He is certain
to quizzed on those comments when he testifies Thursday before the House
Budget Committee.

The economy skidded to a virtual standstill in the final three months of
last year, raising fears the country could fall into a recession, unable to
withstand the multiple blows from the prolonged downturn in housing, a
severe credit crisis and soaring energy costs.

Already, unemployment is rising. The jobless rate jumped to 5 percent in
December, up from 4.7 percent in November. That was the biggest one-month
surge in unemployment since October 2001 in the wake of the 2001 terrorist
attacks.

The various economic threats have sent consumer confidence plunging and
pushed the economy to the top of voters' concerns. Political leaders have
responded, with President Bush, Democrats in Congress and presidential
candidates from both parties putting forward economic stimulus proposals.

The 6.3 percent increase in the Producer Price Index, which measures cost
pressures before they reach the consumer, followed a much more moderate 1.1
percent increase in 2006.

It was the biggest annual price gain since a 6.3 percent rise in 1981, a
year when the Federal Reserve was aggressively raising interest rates in a
successful effort to combat a decade-long bout of stagflation, rising
inflation in conjunction with weak economic growth.

The big increase last year reflected the fact that energy prices rose by
18.4 percent after having declined by 2 percent in 2006. It was the biggest
annual increase in energy costs at the wholesale level since they rose by
23.9 percent in 2005.

However, core inflation, which excludes energy and food, was considerably
more moderate, rising by 2 percent last year, the same as in 2006. The Fed
is closely watching core prices for any signs that the price pressures being
seen in energy and food are starting to spread to other parts of the
economy.

For December, the 0.1 percent drop in overall prices reflected a 1.9 percent
plunge in energy and a 1.3 percent rise in food costs. Outside of food and
energy, core inflation posted a moderate 0.2 percent increase.