Inflation Watch
• Inflation (price change) is important for REALTORS®
because changes in prices in the economy can lead to...
Inflation Watch November 30th,2010
• The consumer and producer price indices (CPI
and PPI) appear to be pretty tame in rec...
Indicator Source and definition Change from
previous month
Change from
previous year
Concern?
Consumer Price Index
(CPI)
B...
Looking at the CPI in More Depth
Indicator Change from previous
month
Change from
previous year
Concern?
Consumer Price In...
CPI-U: All Items Less Food and Energy
% Change - Year to Year SA, 1982-84=100
CPI-U: All Items
% Change - Year to Year SA,...
PPI: Crude Materials for Further Processing
% Change - Year to Year SA, 1982=100
PPI: Finished Goods
% Change - Year to Ye...
Cash Price: Gold Bullion, London Commodity Price, PM Fix
US$/troy Oz
1009080706
Source: Wall Street Journal 11/29/10
1400
...
Domestic Spot Oil Price: West Texas Intermediate
$/Barrel
1009080706
Source: Wall Street Journal 11/29/10
140
120
100
80
6...
Nominal Trade-Weighted Exch Value of US$ vs Major Currencies
Mar-73=100
1009080706
Source: Federal Reserve Board 11/29/10
...
NAR Median Sales Price: Total Existing Homes, United States
2000=100
Houses under Construction: Fixed-Weighted Price Index...
Inflation Watch for November 29, 2010
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Inflation Watch for November 29, 2010

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Inflation (price change) is important for REALTORS® because changes in prices in the economy can lead to shifts in interest rate policy by the Federal Reserve Bank.

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Inflation Watch for November 29, 2010

  1. 1. Inflation Watch • Inflation (price change) is important for REALTORS® because changes in prices in the economy can lead to shifts in interest rate policy by the Federal Reserve Bank. • During the current financial crisis, fears of deflation were present in news reports (deflation can lead downward spiral of prices that destroy an economy similar to what happened in the Great Depression) • While talk of deflation is less, some are fearing that inflation in the coming years may lead to another unpleasant economic condition called stagflation (high unemployment and high inflation) that makes it difficult for the central bank to combat inflation due fear of further job market deterioration.
  2. 2. Inflation Watch November 30th,2010 • The consumer and producer price indices (CPI and PPI) appear to be pretty tame in recent months. • Headline and core inflation is moderate, underlying PPI Crude • Oil prices are steady • Gold, other metals and commodities are moving up strongly. • Dollar is weakening. A weaker dollar makes imported goods more expensive and adds to inflationary pressure
  3. 3. Indicator Source and definition Change from previous month Change from previous year Concern? Consumer Price Index (CPI) BLS, Price change of consumer goods and services + 0.2% + 1.2% No CPI Core BLS, CPI less food and energy unchanged + 0.6% No CPI Housing (owners’ equivalent rent) BLS, CPI housing component (primary residence) + 0.1% unchanged No Producer Price Index (PPI) BLS, Price changes domestic producers receive for their output + 0.4% + 4.3% No PPI Core BLS, PPI less food and energy - 0.6% + 1.4% No PPI Crude Materials BLS, PPI crude / raw materials + 4.3% + 17.1% Yes PPI Residential Construction BLS, PPI BRES + 0.4 + 4.2% Maybe Gold WSJ, Price per ounce of gold + 5.0% + 27.5% Yes West Texas Crude Oil WSJ, Price per barrel of oil - 8.8% + 8.0% Maybe Dollar vs. Major Currencies FRB, Trade-weighted value of dollar vs. major currencies - 3.5% - 0.6% Maybe Construction Cost Index Census, constant quality, new single family homes under construction + 0.6% - 0.5% No
  4. 4. Looking at the CPI in More Depth Indicator Change from previous month Change from previous year Concern? Consumer Price Index (CPI) + 0.2% + 1.2% No Food at home Unchanged + 1.4% No Meats, poultry, fish and eggs + 0.6% + 5.7 Yes Housing fuels and utilities + 0.4% + 2.4% No Household furnishings & operation Unchanged - 2.5% No Transportation (Gasoline) + 4.6% + 9.5% Yes Medical care + 0.2% + 3.6% Maybe Hospital and related services + 0.5% + 7.5% Yes Education Unchanged + 3.7% Maybe Water, sewer, and trash collection services + 0.2% + 5.3% Maybe Personal Computers and peripheral equipment - 0.2% - 3.6% No Wireless telephone services - 0.4% - 3.4% No Televisions - 1.5% - 18.8% No
  5. 5. CPI-U: All Items Less Food and Energy % Change - Year to Year SA, 1982-84=100 CPI-U: All Items % Change - Year to Year SA, 1982-84=100 1009080706 Source: Bureau of Labor Statistics 11/29/10 6 4 2 0 -2
  6. 6. PPI: Crude Materials for Further Processing % Change - Year to Year SA, 1982=100 PPI: Finished Goods % Change - Year to Year SA, 1982=100 1009080706 Source: Bureau of Labor Statistics 11/29/10 50 25 0 -25 -50
  7. 7. Cash Price: Gold Bullion, London Commodity Price, PM Fix US$/troy Oz 1009080706 Source: Wall Street Journal 11/29/10 1400 1200 1000 800 600 400
  8. 8. Domestic Spot Oil Price: West Texas Intermediate $/Barrel 1009080706 Source: Wall Street Journal 11/29/10 140 120 100 80 60 40 20
  9. 9. Nominal Trade-Weighted Exch Value of US$ vs Major Currencies Mar-73=100 1009080706 Source: Federal Reserve Board 11/29/10 88 84 80 76 72 68
  10. 10. NAR Median Sales Price: Total Existing Homes, United States 2000=100 Houses under Construction: Fixed-Weighted Price Index 2000=100 0403020100 Sources: National Association of Realtors, Census Bureau 11/29/10 150 140 130 120 110 100 90 150 140 130 120 110 100 90
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