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.