Price Index Drops 0.5% a 2nd Time

There was a .5 percent drop in consumer prices for October. The same things occurred in the month of September. This trend suggests that declining energy prices and a slowing economy is containing inflation. The primary factor driving the prices index was given to energy prices, from fuel price to the gas bill. The drop assisted in validating the Federal Reserve to cease in raising interest rates since June. Industrial production, including the output of manufacturers, mines, and utilities, also contributed to the inflation data, contrary to what the economists expected. It is unlikely that the Federal Reserve will need to increase interest rates to keep inflation under control any time soon. Blue and white-collar’s hourly wages will reflect the price index drop as well. The is the first substantial boost for workers in years. Energy seems to be the factor driving the increase in the last year and decrease in the past few months. It may have sparked a trend in that clothing costs, the price of used cars, hotel rooms, and airline fares have also decreased.

I think this decrease is exactly what everyone deserves at this point in time. I know that the sudden increase last year was more than some people could handle. It affected everyone and it is pleasant to finally have some relief, especially during the holidays.

The New York Times, Eduardo Porter and Jeremy W. Peters Friday, November 17, 2006

Declining Bill for Oil Imports Improves U.S. Trade Balance

Due to Americans importing less oil, the gaping trade deficit shrank in September. There was a 6.8% decline from August to September for the imbalance of exports and imports. This decline in the steepest that has taken place in nearly two years. However, due to high oil prices in August the decline appears to be greater than it actually was. The Unites States trade situation continues to be imbalanced. As most people are familiar with, trade with China accounts for the greater portion of the deficit. China accounted for a total of $23 billion on an unadjusted basis. The number is so high from China imports that it contributes to about a fourth of the trade deficit. On a positive note, the imbalances of trade with Europe, Africa, and South America have narrowed in recent months.

It is expected that global growth will remain strong and serve as an ongoing support for the U.S. economy, said the chief of the United States economy. Assuming that there will be no world wars anytime soon , depending on other countries for economic support seems to be working well thus far for the U.S. It seems slightly unstable to be so dependent, but I guess it balances out in that they are dependent on us as well.

The New York Times, Jeremy W. Peters Friday, November 10, 2006

Fearing Slow Holiday Sales, Wal-Mart Cuts Prices

Holiday shopping is starting sooner every year. One of the contributors to this commencement is Wal-mart’s reduction in prices. In attempt to counteract the slow sales this season, Wal-mart has already greatly decreased many electronic prices. This presents much more competition for rivals such as target, best buy, and circuit city. The sharp price-cuts were officially announced today. Even though this may seem like a good move for Wal-mart, they are practically forfeiting billions of dollars in holiday sales compared to previous years. A positive aspect for Wal-mart is that they will far exceed their competitors. The idea is to attract customers to their store prior to the day after Thanksgiving sales, which could make them lose money to their competitors. This shift for Wal-mart to focus back on it’s pricing has to do with the failure to persuade it’s customers to purchase more clothing and furniture. Target dominates the market in this area.

After learning about the Wal-mart sweatshops in class, I almost cringe at reading this article. Wal-mart has more money than countries and they are still trying to aim higher. What it also sad is that many people are oblivious of the sweatshops and will continue to shop there. In many lower-income families, it is necessary for them to shop there, because it’s what they can afford.

The New York Times, Michael Barbaro Friday, November 3, 2006