Article for week 11/15-11/19
posted by Arya @ 8:14 AM
Tuesday, November 16, 2004
Contributors
Previous Posts
- Rising wholesale prices
- Article: "Four more years!"
- October Improvement
- A Boost from Young Americans
- Article: What the Election Really Means to You
- Hurricane Season Provides Jobs for Many
- Articles for this week
- Oil Prices Hurt Consumer
- Disaster turned to good causes
- High Oil Prices Hurt Consumers
3 Comments:
This article is basically laying out all of the energy prices from the most recent date, which show that their is a major hike in consumer prices as well, which is not good for us. However these record high levels don't mean certain disaster for our economy, in fact Steven Wieting said that even if the numbers stay at these levels that inflation should level off in the upcoming year. Plus the cost per barrel has dropped some so that means good news for everyone with car access, which would exclude all Georgia Tech Freshman. Prices for food also jumped higher then they have in the past year, with part of that to blame on the weather in Florida, as we all know there were a series of heavy hitting Hurricanes which I have been seeing the lasting damage even now, months later. All of these major price hikes definitly spell bad news for the nation but maybe our newly elected cabinet can make a difference in today's market.
This article is a good article that focuses on "chain-impacts," which would result from one basic commodity affecting other commodities. A great example (used in this article) would be how gas affects the prices for many consumer goods, which in general affects the Producer Price Index (PPI) as a whole. The focus on wholesale foods (food quantities sold in great bulk) probably is the best choice for a CPI analysis, since wholesale foods focus on price per unit, which is what PPI is mainly focused on. Although 4.4% does not seem like much at first, comparing it to other monthly changes gives you a perspective on why such a impact has such huge implications on our economy. Everything from restaurants to laudromats is affected due to the changes in PPI.
This Article brought to my attention just how many factors of living are affected by higher oil prices. When the price of oil goes up, pretty much every product has to increase in price to keep the same profit margin, which makes sense if you think about it. To transport the product and in order for the machines that make the product there needs to be oil involved somehow, someway. Because of the rise in Oil, a rise in energy, food and other wholesale price has occurred. "Clearly some of the earlier increases in the price of crude are beginning to percolate through the economy. We knew it was going to happen," said Sohn. "I'm reasonably sure we've seen the peak (for oil) and it's beginning to trend down and that should do a lot to decelerate inflation." So hopefully when oil prices start to decrease the prices of other products will decrease as well in a direct relation to oil prices. “In the Treasury market, which is typically very sensitive to inflation, bond prices edged lower, pushing the yield on the 10-year note up to 4.21 percent, from 4.18 percent late Monday, as traders bet interest rates would rise further. Bond prices and yields move in opposite directions.” So not only does oil prices have an effect on food and energy, but also bonds and interest rates as well, this is what I like to call the “domino effect”.
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