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Friday, January 22nd, 2010

Consumer Price Data Paints Bleary Picture of 2009

The U.S. Labor Department released its monthly Consumer Price Index data, and the numbers confirm what most Americans can already sense: the recession continues to exact its toll. Here's a look at the numbers for the whole of 2009.

Overall: Consumer Prices Up 2.7 Percent

During 2009, consumer prices rose a collective 2.7 percent, a jump that, according to the Labor Department, was led largely by increased energy prices. In other areas, prices actually fell over the last 12 months:

  • Food: In 2009, food prices dropped by 0.5 percent, with food consumed at home dropping 2.4 percent and food away from home actually rising 1.9 percent.
  • Energy: Here’s where the biggest jump occurs. Energy costs increased 18.2 percent, with a 53.5 percent increase in the cost of gasoline and a 6.5 increase in the price of fuel oil.
  • Everything Else: The umbrella category that includes all consumer goods but the two above saw a 1.8 percent rise during 2009, with increases in everything from clothing to cars to medical services.

So how does the overall 2.7 percent increase in prices compare to recent years? Not too well, it seems. In 2008, prices rose a scant 0.1 percent – though both last year’s change and 2008’s were heavily influenced by fluctuating energy prices.

The core inflation rate, which adjusts price rises with changes in income levels, rose 1.8 percent in 2009, the same figure as that for 2008, and a relatively small number.

Weekly Wages Fall

In addition to prices inching up, Americans saw their weekly wages dip by 1.6 percent in 2009, meaning their buying power has shrunk considerably since a year ago. Last year’s drop was the largest since 1990.

While the picture overall is still pretty bleak, there’s a spot of light in all the clouds: commentators note that because inflation has remained modest, the Federal Reserve will likely keep key interest rates low to stimulate borrowing and help the economy pick up vigor.

The drop is purchasing power also points to the 1.44 million consumer bankruptcy cases filed in 2009.

Additional Resources

Department of Labor January 2010 Consumer Price Index Report (PDF)

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Sunday, July 26th, 2009

June Numbers: Consumer Price Increased but 14.7 Million People Still Out of Work

The United States Department of Labor recently released economic indicators for June, which show, among other things, a jump of about .7 percent in prices for consumer goods from May.

Here’s a boiled-down look at the latest figures:

Consumer Price Increase: Largest in 11 Months

  • Consumer prices up .7 percent: This jump in inflation is the largest since last July, and just over the .6 percent that most economists were predicting. Experts are apparently attributing the jump to increased gasoline prices.
  • Industrial production down .4 percent: In response to decreased demand for a variety of consumer goods, many manufacturers cut back on production in June. Goods in this category include cars, machines and household appliances. The good news: in May, production fell by 1.4 percent – some experts see June’s lower drop as a sign of the recession’s easing.
  • 2009 prices down 1.4 percent from 2008: Though month-to-month to prices rose in June, prices are still lower than they were this time last year. Interestingly, this is the biggest year-to-year drop in about 60 years.
  • Energy prices up 7.4 percent: This jump was affected partly by the 17.3 percent leap upward gasoline prices took last month, as the summer travel season began. Analysts are reportedly predicting, though, that prices should ease a bit as the summer continues – this month has already seen some decline.
  • Car and clothes prices up .7 percent, airfare down .6 percent: Reflecting various trends in consumer demands, some month-to-month changes cancel each other out in the final tally of price changes.

Core Inflation Up .2 Percent in June

Though economists predicted a slightly lower rise of .1 percent in core inflation (which does not take into account food or energy), the .2 percent rise is considered reasonable by most standards.

Since last year, inflation has risen 1.7 percent, a number that jibes with downward pressure on prices typical of a recession.

Unemployment in June

The Labor Department’s numbers for last month show a current unemployment rate of 9.5 percent, up only slightly from May (9.4 percent).

This number translates to about 14.7 million Americans currently out of work.

If you've suffered a job loss and are considering filing bankruptcy, check out www.TotalBankruptcy.com for bankruptcy information and lawyers.

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