Bright side of a recession

Bright side of a recession

Scripps Howard News Service: Here’s sort of good news: You and the Federal Reserve Board don’t have to worry about inflation for the time being.

After dropping slightly — 0.1 percent in August — the Consumer Price Index, the most popular measure of inflation, was flat in September. As recently as June, the Fed was worried about inflation when the CPI spiked 1.1 percent in one month. The annualized inflation rate is still running at an uncomfortable rate of 4.5 percent but for a variety of reasons, not all of them good, that rate seems likely to abate.

Energy costs the key

The biggest reason for the fall off is energy. Oil is down 50 percent since July; thus, energy fell 1.9 percent in September, after a steep decline of 3.1 percent in August. Natural gas and electricity fell 3.2 percent, a record for one month.

Another reason is that people have less money. Weekly wages fell for the 12th straight month, down 2.5 percent from September a year ago. Still another reason is that a lot of workers don’t have jobs. Jobless claims fell 16,000 to a seasonally adjusted 461,000, not as bad as the 475,000 forecast but nonetheless still at levels considered recessionary.

It’s one of those good news, bad news things. The boat may be taking on water but at least it’s not on fire.