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Managerial Economics 1 (Micro)

April 3, 2016 | Author: | Posted in economics, mathematics and economics

January 18 , 2007

Some Signs of Economic Resilience Seen

By HYPERLINK “http /s .nytimes .com /top /reference /timess /people /p /jeremy_w_p eters /index .html ?inline nyt-per ” \o “More Articles by Jeremy W . Peters JEREMY W . PETERS

A tight labor market is pushing up many workers ‘ wages , consumers are spending more at their local shopping malls and the skid in the housing market is easing in some areas of the country

These observations , reported in the latest regional survey of economic conditions by the Federal Reserve , offered further evidence that the [banner_entry_middle]

economy is expanding at a slower pace , but one that has so far defied predictions of a sharper slowdown

The Fed ‘s report , known as the beige book from its jacket cover , came amid other signs of economic resilience yesterday

A survey of industrial production showed unexpected growth last month Furthermore , a sampling of confidence among home builders rose in December

Together , the findings are consistent with some other signs of a muted but healthy expansion – including job growth and rising stock prices – that have come into clearer focus recently

Bernard Baumohl , managing director of the Economic Outlook Group commented : In the last few weeks we ‘ve been getting a string of data that consistently seem to point to an economy that is turning out to be stronger than anyone expected . We really are shifting into a higher gear

Yet there were reminders on two fronts yesterday that resurgent inflation could counterbalance such positive data . In remarks at an economic conference in Scottsdale , Ariz , the president of the Federal Reserve Bank of San Francisco , Janet L . Yellen , said that a labor market going gangbusters ‘ could touch off a spike in prices . And a Labor Department report showed that the prices businesses charge one another for a wide range of wholesale goods rose in December

The Producer Price Index increased 0 .9 percent last month and 1 .1 percent for all of 2006 , significantly slower than 2005 but fast enough to give some investors and economists pause . Stocks closed down yesterday after a day of mixed trading

Food became a lot more expensive in December , causing much of the overall increase . The prices of fruit and vegetables jumped by more than one-fifth . Chicken and fish also cost significantly more than in November . And economists noted that with freezing temperatures laying waste to crops in California in recent days , food prices are likely to increase further

Rising energy costs also contributed to the overall increase in producer prices . Gasoline climbed 7 .1 percent and home heating oil was up 4 percent . Still , the rate of increase was down significantly from November

Some economists said that the new report was not likely to change any minds among Federal Reserve policy makers as they consider whether to change their essentially neutral stance on interest rates when they meet at the end of the month . The Fed generally gives more weight to the Consumer Price Index , which will be released today , as a gauge… [banner_entry_footer]

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