 |
Economic
indicators go up and down. The only certainty is that they will
fluctuate. Fears of inflation returning in its 1970 through 1982
mode should abate. |
| The Labor Department reported that the
producer price index, or PPI, which measures wholesale prices that
businesses charge one another, rose a mere 0.1%overall.
This matched the slowest
rate of price increase
experienced so far this year. |
|
The PPI
inflation gauge declined again in August,
2006. This provides further proof that
prices, which have risen over some 2006 months, may now be
normalizing. |
|
The
PPI's core index, which excludes volatile
prices of food and energy, declined 0.04% in August.
It had also declined in July. |
|
Additional
evidence that the economy is
gradually relaxing was provided by a
separate report illustrating weakness in the housing
market. Housing starts and new building permits both
declined. |
|
The facts regarding inflation surprised
many economists. Few experts had predicted the core index would decline in August. |
| The August results helped lower the annual wholesale inflation
rate to 0.9%. This is the first reading below 1% since early
in 2004. |
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