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The Economy This Week

Small-business owners raise prices amid weaker sales; jobless claims fall.
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The nation's small-business owners continue struggling with higher labor costs and weaker sales, putting upward pressure on inflation. Here's a look at this week's economic developments and how they may affect your business.

Small Firms Raising Prices
Facing higher costs and weaker sales, more small-business owners raised selling prices in December, sparking renewed fears of inflation, the National Federation of Independent Business reported Tuesday.

In a survey of the Washington-based advocacy group's 600,000 members, 27 percent reported higher average selling prices last month, up from 24 percent in November. Typically, about a quarter of the group's members respond to the monthly surveys.

At the same tine, the number of owners expecting real sales gains dropped two points to a net six percent. Of the 37 percent of small businesses reporting lower earnings, nearly half cited weaker sales. Others blamed higher material and labor costs.

"The historic relationship between inflation and the percent of owners reporting higher prices suggests that inflation will be showing some new, unwanted viability," William Dunkelberg, the group's chief economist, said in a statement

Wholesale Sales Up
Sales at the nation's wholesalers rose in November by 2.2 percent to $380.4 billion, nearly double the gains in the previous month, the Commerce Department reported Thursday.

Sales of durable goods rose by 0.9 percent, led by computers, computer peripheries and software, while nondurable goods rose by 3.3 percent.

The inventory to sales ratio continued to decline in November, dropping to a 1.07 month's supply at the current sales pace, down from 1.17 a year ago.

Jobless Claims Fall
The number of new claims for unemployment benefits fell by 15,000 last week to 322,000, the Labor Department reported Thursday.

Despite the declines, jobless claims are seven percent higher than the same time last year.

The advanced seasonally adjusted insured unemployment rate the previous week dropped by 0.1 points to two percent, representing about 2.702 million people filing for claims.

The sharpest declines in new claims last week were in California, Texas and Florida, while gains were reported in Michigan, Wisconsin and Pennsylvania.

Last updated: Jan 10, 2008




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