Can you say, Stagflation?

Doug Henwood dhenwood at panix.com
Fri Sep 6 10:08:44 PDT 2002


pms wrote:


>ECRI US Inflation Gauge 109.0 In Aug Versus July 107.0
>
>NEW YORK -(Dow Jones)- An index designed to anticipate cyclical turning
>points in inflation rose to 109.0 in August from 107.0 in July, the Economic
>Cycle Research Institute said Friday.
>The smoothed annualized growth rate of the index rose to 18.8% in August
>from 15.7% in July.
>
>ECRI said the gauge was pushed up by a continued surge in real-estate loan
>growth, stronger job growth, and a tighter yield spread in Treasury
>securities.
>
>"Challenging the concern in some quarters about deflation, the gauge
>indicates that even with a sub-par recovery, U.S. inflationary pressures are
>on the rise," the report said.
>
>Weekly updates of the index are released only to subscribers.

Not true. The index is available at <http://www.businesscycle.com/data.asp>.

Economy.com's analysis points out that the inflationary pressures are being felt mainly in the housing market (which isn't surprising, given that the index is being driven upward by real-estate loans). So, once again, it's more an inflation in asset prices - houses this time rather than stocks - and not in goods and services.

Doug



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