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Inflation watch 4.18.11

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  • 1. RESEARCH
    April 2011 Inflation Watch
    An Eye on Prices
    April 15, 2011
    Next Release: May 13, 2011
  • 2. Inflation Watch
    Inflation (price-level growth) is important for REALTORS® because it can lead to shifts in interest rate policy by the Federal Open Market Committee (FOMC).
    Generally, the FOMC lowers interest rates to stimulate the economy. However, rates that are too low may lead to inflation. To combat inflation, the central bank increases interest rates but this policy may dampen economic growth.
    For example, lower mortgage rates could bring home buyers into the market and create jobs while higher mortgage rates caused by inflation or central bank action could reduce demand among home buyers.
    RESEARCH
  • 3. Inflation Watch
    During the recent financial crisis, fears of deflation (price-level decline) were rampant. (Deflation caused a downward spiral of prices that destroyed the economy in the Great Depression.)
    With financial markets now stable, some fear that inflation is around the corner. Stagflation, another unpleasant economic condition characterized by high unemployment and high inflation, is also a possibility.
    In stagflation, it is difficult for the central bank to raise interest rates to combat inflation due fear of further job market deterioration if demand is hurt by the increased interest rates.
    RESEARCH
  • 4. April 2011 Highlights
    Increases in producer prices are beginning to creep into consumer prices, especially in energy prices
    Headline consumer prices increased far too quickly in the month; only apparel, computers, and household furnishings have seen price declines
    A survey of industry economists finds rising prices and the expectation of further price and cost increases
    RESEARCH
  • 5.
  • 6.
  • 7. PCUSLFE
    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
    PCUSLFE.EMF (USECON) PCUSLFE / PCU 10603-11102
  • 8. PCUHSHO
    CPI-U: Owners' Equivalent Rent/Primary Residence
    % Change - Year to Year SA, Dec-82=100
    PCUHSHO.EMF (USECON) PCUHSHO 10103-11102
  • 9. SP3000
    PPI: Finished Goods
    % Change - Year to Year SA, 1982=100
    PPI: Finished Goods less Food and Energy
    % Change - Year to Year SA, 1982=100
    SP3000.EMF (USECON) SP3000 / SP3500 10603-11102
  • 10. PZGOL
    Cash Price: Gold Bullion, London Commodity Price, PM Fix
    US$/troy Oz
    PZGOL.EMF (USECON) PZGOL 10603-11102
  • 11. PZTEX
    Domestic Spot Oil Price: West Texas Intermediate
    % Change - Year to Year $/Barrel
    PZTEX.EMF (USECON) PZTEX 10103-11102
  • 12. PMEA
    Import Price Index: All Imports
    NSA, 2000=100
    PMEA.EMF (USECON) PMEA 10004-11103
  • 13. CCIHF
    Houses under Construction: Fixed-Weighted Price Index
    NSA, 2005=100
    NAR Median Sales Price: Total Existing Homes, United States
    $
    CCIHF.EMF (USECON) CCIHF / USMNBDP 10102-11101