Inflation watch 4.18.11


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Inflation watch 4.18.11

  1. 1. RESEARCH<br />April 2011 Inflation Watch<br />An Eye on Prices<br />April 15, 2011<br />Next Release: May 13, 2011<br />
  2. 2. Inflation Watch<br />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). <br />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. <br />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.<br />RESEARCH<br />
  3. 3. Inflation Watch<br />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.)<br />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.<br />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. <br />RESEARCH<br />
  4. 4. April 2011 Highlights<br />Increases in producer prices are beginning to creep into consumer prices, especially in energy prices<br />Headline consumer prices increased far too quickly in the month; only apparel, computers, and household furnishings have seen price declines<br />A survey of industry economists finds rising prices and the expectation of further price and cost increases<br />RESEARCH<br />
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  7. 7. PCUSLFE<br /> CPI-U: All Items Less Food and Energy<br /> % Change - Year to Year SA, 1982-84=100<br /> CPI-U: All Items<br /> % Change - Year to Year SA, 1982-84=100<br /> PCUSLFE.EMF (USECON) PCUSLFE / PCU 10603-11102<br />
  8. 8. PCUHSHO<br /> CPI-U: Owners' Equivalent Rent/Primary Residence<br /> % Change - Year to Year SA, Dec-82=100<br /> PCUHSHO.EMF (USECON) PCUHSHO 10103-11102<br />
  9. 9. SP3000<br /> PPI: Finished Goods<br /> % Change - Year to Year SA, 1982=100<br /> PPI: Finished Goods less Food and Energy<br /> % Change - Year to Year SA, 1982=100<br /> SP3000.EMF (USECON) SP3000 / SP3500 10603-11102<br />
  10. 10. PZGOL<br /> Cash Price: Gold Bullion, London Commodity Price, PM Fix<br /> US$/troy Oz<br /> PZGOL.EMF (USECON) PZGOL 10603-11102<br />
  11. 11. PZTEX<br /> Domestic Spot Oil Price: West Texas Intermediate<br /> % Change - Year to Year $/Barrel<br /> PZTEX.EMF (USECON) PZTEX 10103-11102<br />
  12. 12. PMEA<br /> Import Price Index: All Imports<br /> NSA, 2000=100<br /> PMEA.EMF (USECON) PMEA 10004-11103<br />
  13. 13. CCIHF<br /> Houses under Construction: Fixed-Weighted Price Index<br /> NSA, 2005=100<br /> NAR Median Sales Price: Total Existing Homes, United States<br /> $<br /> CCIHF.EMF (USECON) CCIHF / USMNBDP 10102-11101<br />