Entries in Inflation (12)


Fed's 'Beige Book' Report Finds Slow Economic Growth Across US

Comstock Images/Thinkstock(WASHINGTON) -- With a government default looming as lawmakers struggle to strike a deal to lift the nation's $14.3 trillion limit, Americans faced even more negative news about the economy on Wednesday.

The Federal Reserve said in its latest "beige book" report on the financial state of the central bank's 12 districts that two-thirds of these areas experienced slower economic recovery during June and the early part of July.

This follows a pattern since the start of the year when things began looking up due to increased holiday sales in December and companies starting to hire.  However, higher fuel costs, the natural disasters in Japan and unease throughout Europe and the Middle East grounded the modest recovery to a halt.

And yet, there was actually some good news in most of the regional districts watched by the Fed.

According to the "beige book," inflation pressure has eased throughout most of the U.S. and a drop in gasoline prices has meant that consumers are spending more in stores.

There was also a slight growth in hiring although the housing market, which triggered the recession in November 2007, remains weak.

Copyright 2011 ABC News Radio


Chinese Inflation Rises Past Six Percent

ChinaFotoPress/Getty Images(BEIJING) -- China's inflation rate is the fastest it's been in three years, according to the National Bureau of Statistics.

The consumer price index increased to 6.4 percent in June, the report said.

The increase is being attributed to a 14 percent rise in food prices.

Pork, a Chinese food staple, reportedly rose 57 percent in June.

Copyright 2011 ABC News Radio


China Raises Interest Rate to Combat Inflation

Getty/George Doyle/Thinkstock(BEIJING) -- China raised key interest rates for a fifth time in nine months on Wednesday, in an attempt to alleviate surging inflation.

Inflation hit a 34 month high of 5.5 percent in May and is expected to go higher than 6 percent in June.

The central bank announced key lending and deposit rates would rise by a quarter of a percent. 

The rate for one-year loans was raised to 6.56 percent, from 6.31 percent.

The one year deposit rate was increased to 3.5 percent, from 3.25. The deposit rate increase will be effective Thursday.

Copyright 2011 ABC News Radio


Consumer Spending, Personal Incomes Rise 0.4% in April

Brand X Pictures/Thinkstock(WASHINGTON) -- American consumers spent more and earned more in April, but the numbers are not as good as they may look. Both spending and incomes rose 0.4% last month and if it wasn't for inflation, that would be a reasonably strong gain. But the Commerce Department says most of the increase was eaten up by higher gas and food costs. Because of this, there's little left over for increased spending on other products.

The savings rate was unchanged in April, now at its lowest average in two and a half years.

Copyright 2011 ABC News Radio


Consumer Prices Rise Amid High Gas Prices

Jupiterimages/Thinkstock(WASHINGTON) -- Inflation is at its highest level in two-and-a-half years, mainly due to higher gas prices last month, according to the latest report released Friday by the Labor Department.

The government said the Consumer Price Index went up 3.2 percent in the last 12 months, marking the highest increase since October of 2008.  In April alone, prices went up 0.4 percent.

Much of the increase is accredited to soaring gas prices, which rose 3.3 percent in April.  Gas now costs 33.1 percent more than it did just a year ago.

Copyright 2011 ABC News Radio


US Economy Shows Positive Signs

Comstock Images/Thinkstock(CHICAGO) -- Rising job figures and dropping gas prices may help alleviate some of the economic pain felt by many cash-strapped Americans.

Nationwide, gas prices dropped nearly a penny since midnight Thursday. In Milton, Fla., regular unleaded gasoline dropped from the $3.80s to $3.55 in a single day.

"I'm feeling really confident in the economy," Chicago resident Carl Sanders told ABC News. "We've been having a big turn around."

Americans have been delivered a triple-whammy of encouraging economic news. Private employers went on an April hiring spree, adding 260,000 jobs, the strongest gain in five years. Gas prices, instead of heading toward $5, are forecast to fall well below $4 by Memorial Day. Food prices have fallen in line with inflation, and clothing prices have declined.

"We're finally hearing good news again, and we've been hearing it consistently since the beginning of the year," Diane Swonk, chief economist at Mesirow Financial, told ABC News. "The green shoots out there appear to be a little more green, and there's more of them."

If pump prices continue to settle, Seattle resident Cheryl Sanders says she might drive her new car to the mall and spend some more. She was out of work for a year, but is now re-employed and feeling better about buying.

"I'm not worrying as much about the little things," she told ABC News. "If we want to go out to dinner, we do it. If we want to go to a movie, we do it. It's nice to not have to worry about every penny that's going out."

In Schaumburg, Ill., near Chicago, a family-owned manufacturing company called Quality Float Works Inc. is just one of the companies across the country that's on a hiring binge.

"We've hired two people since the beginning of this year, and we are looking for two positions in our factory that we are looking to fill immediately," Jason Speer, Quality Float Works' owner, told ABC News. "And if things continue, we will be hiring several more people later on this year."

Welcomed news for the hundreds of thousands of Americans who are still out of work.

Copyright 2011 ABC News Radio


Bernanke Takes Stage, Fed Downgrades GDP and Inflation Forecast

Brendan Smialowski/Getty Images(WASHINGTON) -- As Fed Chairman Ben Bernanke took to the podium Wednesday at the first press briefing the in Fed’s history, the nation’s central bank issued a downgraded economic forecast for the United States in 2011.

According to new numbers released by the Fed, the nation’s overall economy will likely grow slower and consumers will face higher inflation than the Fed anticipated in their January projections.

According to the new Federal Reserve forecast, overall Gross Domestic Product growth will be between 3.1 and 3.3 percent in 2011, lower than the January projection of 3.4-3.9 percent growth. Price inflation will also pick up this year, with prices increasing between 2.1 and 2.8 percent; the January projections were for 1.3-1.7 percent headline inflation.

One positive note to the new Fed forecast -- unemployment will likely average between 8.4 and 8.7 percent for the full year, better than the 8.8-nine percent projection the central bank issued at the beginning of the year.

Copyright 2011 ABC News Radio


Walmart CEO: Inflation 'Serious' Concern

Justin Sullivan/Getty Images(NEW YORK) -- Walmart CEO Bill Simon says American consumers could face “serious” inflation in the coming months for clothing, food and other products.

“We saw it start to come in late last year -- commodities, certainly cotton,” Simon told USA Today’s editorial board on Wednesday. “There's a lot of the places showing up now in dairy, and we're starting to see it come into things that are transportation-related, like paper.”

Simon said his company is trying to keep costs down by working directly with its suppliers, but admitted that Walmart is “seeing cost increases starting to come through at a pretty rapid rate.”

Copyright 2011 ABC News Radio


Just How Big Is the Threat of Inflation?

Photo Courtesy - Getty Images(NEW YORK) -- The price of gasoline is up sharply in recent days.  Food inflation is also rising, but a new report released Monday finds that most other prices remain under control.

Richard Wobbekind of the National Association for Business Economics says the problem seems more scary than it really is.

"I call this the great disconnect," he says.  "When I go to the grocery store, I have a heart attack.  And when I go to the gas pump, I'm looking at gas prices that have risen dramatically in the past year.  Looking at those two think I'm saying, 'Boy everything costs a lot more.'"

But Wobbekind adds that when we look at the overall picture, we see that things like housing are included in that larger view.

"Of course, housing costs have been going down."

Many consumer electronics products are also cheaper, experts say.

Copyright 2011 ABC News Radio


Drug Firms Pay $421 Million in Settlement with Justice Department

Photo Courtesy - Getty Images(WASHINGTON) -- The Justice Department announced a $421 million settlement against three pharmaceutical companies on Tuesday for their alleged involvement in a scheme to drastically inflate the price of drugs --sometimes by a whopping 1,000% -- which was reimbursed by Medicare and Medicaid and, ultimately, the U.S. taxpayer.

The settlements were reached in three False Claims Act cases filed against Abbott Laboratories, B. Braun Medical Inc. and Roxane Laboratories.  Both B. Braun and Roxane are U.S. subsidiaries of German pharmaceutical firms.

Under the settlement agreements, Abbott Laboratories agreed to pay $126.5 million in fines, B. Braun Medical agreed to pay $14.7 million, and Roxane will pay $280 million for making Medicare and Medicaid pay the allegedly inflated reimbursements.

The investigation into the companies' activities followed a whistleblower lawsuit filed by Ven-A-Care, a home infusion company based in southern Florida.  A civil complaint against Abbott filed by Ven-A-Care in 2007 noted that Abbott was charging huge mark-ups on the price of their drugs when they sought reimbursement from the government.

Copyright 2010 ABC News Radio

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