Consumer confidence up

August figures from The Conference Board showed an increase in the consumer confidence index, the first month of positive figures following 6 consecutive monthly declines since January. Falling gas prices was the main reason consumers felt less pessimistic. Economists say they can't underestimate the relief felt that gas prices are coming down, but there is still worry about a weak job market, tight credit conditions, and the housing slump. People who said jobs are "hard to get" rose to 32% from 30.2% in July. That figure means 1 in 3 persons are struggling to find jobs.

Inflation Spiking

U.S. Gov't figures for July showed inflation rose at highest monthly level since 1991.Private home foreclosures continue at record pace.Mortgage lenders continue to absorb billions in losses from ill-advised sub-prime mortgages that millions of homeowners are defaulting on.The Federal deficit grows as more taxpayers are laid off,banks are bailed out,and the cost of fighting in and the rebuilding of Iraq.Billions leave the US daily destined to the oil sheikhs.Retailers predict consumer spending will stay weak until late 2009.Americans on fixed incomes and with savings are getting anemic returns on savings accounts because the Federal Reserve is stubbornly keeping the prime rate low in the futile hope people will buy homes.Inflation is higher than a savings account return.Many Americans are paying bills with credit cards,further sinking in debt.

Consumer Prices rise in June 08

June consumer prices rose 1.1%,while weekly wages fell 0.9% even after adjusted for inflation.On July 15,the US Dept. of Labor said wholesale prices were rising at the highest annual rate since 1981.The only time in the past 25 yrs. that inflation has been at such a high rate as now was Sept. 2005,mostly because Hurricane Katrina shut down oil refineries and oil prices had a sudden and steep increase.With gasoline over $4 per gallon and staying there as far as anyone can predict,possibly even climbing,the average consumer is in a besieged mentality.Oil prices are 80% higher than 12 mos. ago.

Economic Turmoil

With financial markets reeling,soaring budget deficits swollen from costs of wars in Afghanistan and Iraq and increased spending on domestic security,there is little taxpayer money for bailing out failing financial institutions.Inflation is rising,fueled by rising food and gas prices.Mortgage lenders Fannie Mae and Freddie Mac,which hold 50% of all US mortgages,have lost 80% of their stock value over the last 12 mos.The risk of runs on banks is rising as depositors lose confidence.Federal regulators seized IndyMac Bank on July 11,after hundreds of depositors lined up to withdraw their money.The bank reopened on July 13 under federal control.Meanwhile,layoffs continue to increase.

Gas prices impacting all sectors

Vacation travel this summer will certainly drop off as gas prices will stay above $4 gallon.People with oil heaters in their homes are bracing for a winter of unknown prices.Boaters,bus lines,airlines,and any recreational geared business are all looking at a lean summer season.People who once annually took summer vacations are staying home.The suddeness and extreme hike in gas prices is impacting the U.S. economy radically.The middle class is in such a bind that simply driving less is mandatory to living within a budget.Gas efficient cars are certainly a growth market.Driving for leisure or pleasure is probably gone forever for all but the wealthy.

gasoline crisis

Gas is rapidly reaching a point where supply simply cannot feed demand.Prices will certainly continue to rise.$5 a gallon is coming,and soon.China and India,to name two,are daily needing more gas.Available reserves are not enough.Basically,it took 100 years from widespread use of the gasoline engine to use up oil.Alternatives such as hybrid engines still depend to some degree on gasoline.Ethanol or biofuels from corn or sugar cane cannot carry the complete load that would shift from no gas at all.Fossil fuels will soon be literally just that.

gas sets another record high

Americans cut back on gas consumption 1.4% over the past 4 wks.As if in reply,crude oil prices rose.Soaring demand in Asia and elsewhere is ensuring oil supplys remain tight.Analysts predict upward spike will continue,and say there is no end in sight.Most agree $5 a gallon by end of July.Perhaps soon $4 a gallon will be looked at with nostalgia.$6 a gallon will certainly put such a weight on the economy as to forcibly make doing business for many companies unfeasible,as they can only pass so much on to their customers.Many small town police forces are cutting back patrols,for example.