The Clinton Herald, Clinton, Iowa

Breaking News

National News

November 21, 2013

Solid retail sales lift hopes

(Continued)

Because consumers fuel about 70 percent of U.S. economic activity, expectations have arisen that the better-than-expected retail sales last month could build momentum for November and December.

Before October’s retail sales report, most analysts predicted that the overall economy would grow at a weak annual rate below 2 percent in the current quarter. But after the report was issued Wednesday, Paul Dales, senior U.S. economist at Capital Economics, boosted his forecast: He thinks additional consumer spending will cause the overall economy to grow at an annual rate between 2 percent and 2.5 percent this quarter.

Coupled with the retail sales was a slight decline last month in consumer prices.

The consumer price index fell 0.1 percent in October, the Labor Department said. A sharp 2.9 percent drop in gasoline prices largely caused inflation to be held in check. Over the past 12 months, inflation has averaged 1 percent, well below the Federal Reserve’s 2 percent target.

U.S. gasoline prices began falling in the spring and reached two-year lows earlier this month. The average price of a gallon of gas was $3.21, according to AAA’s Daily Fuel Gauge Report.

And just as clothing purchases rose in October, consumers benefited from declining apparel prices. They fell 0.5 percent for the second consecutive month.

But inflation rates this low are a double-edged sword: Lower prices tend to signal an economy struggling to grow at a healthy pace.

Inflation has been modest over the past four years, with prices held down by the weak recovery from the Great Recession. Unemployment remains high at 7.3 percent. And many Americans who do have jobs are not receiving pay increases. That’s made it difficult for consumers to spend more and for retailers to charge more.

“Can spending hold up?” said Joel Naroff, president of Naroff Economic Advisors, in a client note. “That is not clear. Real earnings, which are adjusted for inflation, rose moderately but only because inflation fell. Not adjusted for inflation, compensation went essentially nowhere.”

Text Only
National News
  • Medicare hospital fund to last 4 years longer

    Medicare's finances are looking brighter, the government said Monday. The program's giant hospital trust fund won't be exhausted until 2030 — four years later than last year's estimate.

    July 28, 2014

  • After 6 weeks, finally a deal on VA health care

    After more than six weeks of sometimes testy talks, House and Senate negotiators have agreed on a compromise plan to fix a veterans health program scandalized by long patient wait times and falsified records covering up delays.

    July 28, 2014

  • Brother sues W.Va. senator over business loan

    U.S. Sen. Joe Manchin III faces a $1.7 million civil suit filed by a brother over a lifeline to save a family carpet business.

    July 25, 2014

  • Official: Hospital gunman intended to kill others

    A psychiatric patient ranted about a hospital gun ban before opening fire at the suburban medical complex, killing his caseworker and grazing his psychiatrist before the doctor pulled out his own weapon and fired back, authorities said Friday.

    July 25, 2014

  • 10 things to know for today

    Your daily look at late-breaking news, upcoming events and the stories that will be talked about today:

     

    July 25, 2014

  • Illinois woman, 47, dies rescuing boy in Wisc. lake ARLINGTON HEIGHTS, Ill. (AP) — Friends and family are mourning the death of an Illinois woman who drowned while rescuing a 9-year-old boy in a Wisconsin lake.The (Arlington Heights) Daily Herald reports 47-year-old Karen Wessel of Arlington Heights d

    July 25, 2014

  • Taiwan plane crash photo Air travel a leap of faith for passengers WASHINGTON (AP) — Airline travel requires passengers to make a leap of faith, entrusting their lives to pilots, airlines, air traffic controllers and others who regulate air travel.Even after a week of multiple tragedies in worldwide aviation, “There

    July 25, 2014 1 Photo

  • Arizona's prolonged lethal injection is fourth in U.S. this year

    Arizona's execution of double-murderer Joseph Wood marked the fourth time this year that a state failed to dispatch a convict efficiently, according to the Constitution Project, a bipartisan legal group.3

    July 24, 2014

  • 10 things to know for today

    Your daily look at late-breaking news, upcoming events and the stories that will be talked about today:

     

    July 24, 2014

  • U.S. economy, though sluggish, may now be sturdier WASHINGTON (AP) — Out of a seemingly hollow recovery from the Great Recession, a more durable if still slow-growing U.S. economy has emerged.That conclusion, one held by a growing number of economists, might surprise many people. After all, in the fi

    July 24, 2014

AP Video
Facebook