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This Week’s Economic Roundup

Consumer prices hold steady; manufacturing and labor markets post gains.
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Feb. 23, 2006--Amid rising energy prices and fears of inflation, consumer prices remained steady in January -- one of several signs of renewed economic strengths for small businesses. Here's a look at this week's economic developments and how they may impact your business.

Consumer Prices Contained

Small-business owners wary of inflation were reassured Wednesday by a Labor Department report showing only a modest rise in core consumer prices in January.

While overall prices climbed by 0.7% in January on higher energy and food costs, so-called core prices -- stripped of energy and food -- rose just 0.2% and remained roughly unchanged from the past two months, the department said.

Prices for housing, apparel, medical care, recreation, education and communication, and other goods and services all rose less than half a percent in January, the department said.

Although broad inflationary pressures were contained, the report showed, small businesses nationwide were still grappling with volatile energy prices, which shot up a full 5% in January after sharp declines in previous months.

Leading Indicators Up

On Tuesday, the Conference Board, a private New York-based research group, reported a 1.1% rise in its monthly index of leading economic indicators for January -- the fourth straight month of gains -- led by renewed strengths in manufacturing and the labor market.

Six of 10 indicators making up the leading index saw positive gains in January, including average weekly jobless claims, the real money supply, building permits, and vendor performance, the report showed. The biggest drag on the index last month was consumer expectations, the board said.

The board's index of coincident indicators -- a measure of current activity that tracks payrolls, income, and sales -- was also up, by 0.2% from December, the report showed.

The labor market continued to gain strength this month, with first-time jobless claims dropping unexpectedly in the week ending Feb. 18, the Labor Department said Thursday.

Labor Market Gains

Claims for unemployment benefits fell by more than 20,000 to 278,000, compared to a weekly average over the past 12 months of 326,000, the department said. The unemployment rate among workers eligible for benefits stood firm at 1.9%.

Last updated: Feb 23, 2006




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