Monday, October 15th, 2007
Retail Sales Skyrocket and Inflationary Pressures Remain Dormant
From Staff Reports
The U.S. Commerce Department reported a big jump in September retail sales Thursday, according the Associated Press. The 0.6% increase outpaced projections and doubled the rise in sales seen in August. The positive news warded off much of the recession talk looming over the credit crunch and housing market.
Weak sales in department stores and specialty clothing shops were offset by strong auto sales, which were up 1.2% in September and 3.3% in August. Sales of gasoline in September jumped 2%, after sinking 2.6% the month prior.
The positive report is good news for the economy, but will disappoint some investors hoping for another rate cut.
"This was a solid report that seems to point to continued consumer spending," said Joel Naroff, president of Naroff Economic Advisors Inc., an econometric-research firm based in Holland, Pa. "As a consequence, the chances of a Fed ease on October 31st seem to be fading."
Also, the Labor Department said core prices, which exclude food and energy, rose just 0.1% - less than many analysts anticipated. Fueled by soaring food and energy costs, the overall wholesale inflation figure rose 1.1%. That increase was driven by a 4.1% surge in energy prices in September, and an 8.4% rise in the cost of gasoline. Still, the Federal Reserve and its Chairman Ben S. Bernanke prefer to gauge the core inflationary rate.
News and Related Story Links:
- The Associated Press:
Retail Sales Jump Up in September.
Jim Rogers: China’s Expansion Depends on Water
Oil isn’t China’s most precious resource. China must spend $162 billion in the next five years to clean up its polluted rivers-as nearly 40% of them are undrinkable. "China has a huge water problem," Legendary investor Jim Rogers says. "…If they don’t solve it, or if they don’t solve it in time, then China has failed." Find out which six global water treatment powerhouses are set to make “liquid profits.”
