Last Week in the News

[Adam in CO]

Wholesale prices (Producer Price Index) inched up 0.1% in July, the smallest increase in five months and far below the 0.5% jump in June, the Labor Department said August 15. Excluding volatile food and fuel costs, core wholesale inflation fell by 0.3% in July. That was the best showing for core inflation in nine months.
Consumer prices (Consumer Price Index) jumped 0.4%, double the June increase, the Labor Department reported August 16. However, outside of food and energy costs, prices rose just 0.2%, the smallest gain in five months.
Two other reports issued August 16 supported the view a slowing economy could help to hold inflation in check. The Federal Reserve reported that industrial production rose by 0.4% in July, half of the June gain, and the Commerce Department said the pace of new home construction dropped by 2.5% in July, the fifth decline in the past six months and the lowest level of activity in two years.
The Index of Leading Economic Indicators, which measures 10 key sectors of the U.S. economy, fell 0.1% in July, following an increase of 0.1% in June. The Conference Board, which published the index August 17, said lower consumer confidence, a more pronounced slowdown in the housing sector, and higher interest rates and fuel prices were causing a drag on the economy.
By week's end, oil prices slid to approximately $70 a barrel on the news of increasing U.S. oil stockpiles. The Labor Department also reported August 17 that unemployment claims fell 10,000 from the previous week, the largest decrease in the last four weeks.
This week look for updates on existing home sales on August 23 and new home sales on August 24.