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| Home Front Economy |
| US consumer prices slide 1.7% |
| 2008-12-17 |
| Consumer prices and homebuilding hit record lows in November, according to government data released on Tuesday. Prices in the US fell by 1.7 per cent in November from the previous month as the plunging value of oil and deep discounts from retailers drove down the cost of living, the department of labour said. Overall prices increased by 1.1 per cent year-on-year. Economists predict they could fall flat by January and sink to -2 per cent by next July. The last negative inflation rate was recorded in August 1955. The second record decline in as many months came as collapsing energy prices fell by 17 per cent last month, double the October drop. Energy prices are 32.4 per cent below their peak in July, and the price of petrol fell by 29.5 per cent in November. Falling prices could represent a glimmer of economic relief for struggling consumers. According to economists at RDQ Economics the plunging energy prices represent a $130bn boost to real household incomes when compared to February 2007 prices. Core inflation, excluding the price of food and energy, was unchanged in November and rose by 2 per cent year-on-year. Slight increases in prices for some commodities and services were offset by declines in the prices of cars, airline fares and hotel rates. The stagnant core inflation rate could continue to stoke fears of deflation, notes Alan Ruskin, a strategist at RBS Greenwich Captial. Meanwhile, the plummeting number of US housing starts signalled that the excessive supply of homes may be approaching a trough. The commerce department said on Tuesday that US homebuilders have halted construction of new homes to a record level. Housing starts dropped by an annual rate 18.9 per cent in November to 625,000. Starts for single-family homes fell 16.9 per cent to a record-low 441,000. Falling prices have caused builders and producers to slash production, fearful that what they build will be worth less in several months, according to Brian Bethune, an economist at IHS Global Insight. The drop was worse than economists expected and was the sharpest monthly decline since 1984. |
| Posted by:lotp |
| #11 I do, however, disagree with Besoeker. People come here, for the most part, for the freedoms the United States espouses and always has. It just might be the Immigrants that save us. |
| Posted by: Deacon Blues 2008-12-17 21:33 |
| #10 I have to agree with Frank G. Someone making 50 grand a year (gross) qualifies for a 250-300 grand mortgage with little or no money down and prices skyrocketed. Overpriced and homes and unsustainable mortgages, encourgaged by a very lax congress, doomed the mortgage business. Let housing prices fall. |
| Posted by: Deacon Blues 2008-12-17 21:23 |
| #9 Another is to reduce supply by having the government buy houses and destroy them. (Don't laugh. It's being done in some cities.) Another is to increase demand. How? Increase immigration. It is how all of us got here in the first place. Think of it as selling citizenship, sort of like a senate seat. If you come to America and buy a house, you get to be a citizen NS - that's a crock. Housing was overpriced, unqualified buyers and speculators bought up the price increase with subprime loan heat. It will stabilize and gradually rebuild value. To say that new immigrants can/should afford single-family home ownership is crazy. They neverhave (with exceptions) and the current crop of unskilled, uneducated labor illegally immigrating certainly won't/shouldn't for a generation or two in a realistic world, without fraudulent loans and subprime loans with outrageous terms. They don't have the tools or resources. The exceptions? Skilled, educated, sure...they can and should. The decade of house speculation is over, for a while. I do structural engineering on the side for remodels, additions, new homes, and commercial, and that has dried up for the most part. Glad I'm not trying to make a living on that, just keeping my skillz up and toe in the water. The last code change was a bitch |
| Posted by: Frank G 2008-12-17 20:56 |
| #8 One cause of our economic difficulties is that we have built too many houses. Supply now exceeds demand so prices will fall until supply and demand reach equilibrium. That is why the prices of everything else is now falling. It's the loss of wealth effect. One way to solve this problem is to let prices fall. But that erodes everyone's asset values. And is only fun if you liquidated before the bubbles burst. Another is to reduce supply by having the government buy houses and destroy them. (Don't laugh. It's being done in some cities.) Another is to increase demand. How? Increase immigration. It is how all of us got here in the first place. Think of it as selling citizenship, sort of like a senate seat. If you come to America and buy a house, you get to be a citizen. And a higher proportion of the immigrants I've met understand America and the work ethic that made this country than do native born Americans. So knock immigrants all you want, but they are the easiest way out of our current pickle. |
| Posted by: Nimble Spemble 2008-12-17 13:34 |
| #7 while we still have 12 million illegals here No we don't, OldSpook. At least a million have quietly gone home, plus legal Mexicans who had to go home to apply for new visas, then decided to make a new life in their own country instead. The Mexican State Department has set up a hotline in Arizona for their citizens desiring clarification of new state regulations. |
| Posted by: trailing wife 2008-12-17 13:16 |
| #6 Deflation. More like temporary disinflation. Outside of durable goods, my guess is that deflation is a head fake. Inflation is more likely, tho thank's to most of the rest of the western world having the same problems, the dollar will continue to slowly rise against the Euro and the Pound and we'll end up in pretty decent shape when this is all over. Global recovery begins here, ladies and gentlemen. Except for those of us that are buying gold at it's peak and losing money while we are stashed with our gold in our hidey-holes, safely avoiding the bird flu and taking part in the recovery |
| Posted by: Mike N. 2008-12-17 10:32 |
| #5 Not deflation, low inflation. The core rate still increased by 1.1% and Dec. energy prices will show an increase. We have been importing low inflation from China for past 15 years and now we're broke. We have two choices. 1. Import less. As American production is substituted for Chinese, inflation will accelerate. 2. Debase our currency, which the Feds are doing a fine job of by committing a possible $7 trillion to bailouts so far. Either way, inflation goes up. |
| Posted by: ed 2008-12-17 09:09 |
| #4 #2 And yet, in spite of losing 500K jobs in November alone, our LEGAL immigration pulled in 140,000. Which only illustrates that the globalization, and planned transformation (read that 'sell out') of America and our western culture will not only continue, but accelerate in difficult times. |
| Posted by: Besoeker 2008-12-17 08:18 |
| #3 Some downturns worse than others. "and put money toward training AMERICANS" ?? Whose money? Need to improve or upgrade your skill sets? Use your own fucking money, not mine. The Wife Unit, after selling her business, in the worst economy in the history of man - thanks to President Bush(snark, snark, chortle)has landed five jobs in the last 30 months - got fired from three(made the mistake of giving two weeks notice, "Two weeks notice? You're fired." like that. heh) Don't look to barry for help, him and his ilk created this fucking mess with the express intent of enslaving more lazy, dumbfuck, entitled mentality sheeple. That's how they roll, like that. Do crime if you must BUT don't take that welfare check or you're doomed. |
| Posted by: Last Breath Farm Resident 2008-12-17 08:12 |
| #2 And yet, in spite of losing 500K jobs in November alone, our LEGAL immigration pulled in 140,000. And don't get me started on 10 million Americans unemployed while we still have 12 million illegals here -- especially the younger Americans who are competing for entry level jobs against these illegals. See what jobs are in demand, and put money toward training AMERICANS to do those, get rid of H1-B and other stupid laws like it. |
| Posted by: OldSpook 2008-12-17 01:39 |
| #1 Deflation. |
| Posted by: OldSpook 2008-12-17 01:36 |