The Economy This Week
With small-business owners already fretting over inflation, consumer prices in June jumped by the sharpest rate in a quarter century. Here's a look at this week's economic developments and how they may affect your business.
Consumer Prices Rising
Higher energy costs drove consumer prices up by 1.1 percent in June, the sharpest monthly increase in 26 years, the Labor Department reported Wednesday.
Excluding food and energy prices, which rose by 6.6 percent last month, so-called core consumer prices increased by 0.3 percent, the report said.
Last month's gains nearly doubled price increases in May, which rose by 0.6 percent.
Earlier this week, Federal Reserve Chairman Ben Bernanke told a congressional committee that inflation would likely "move temporarily higher" in the months ahead.
Retail Sales Weak
Retail sales rose by just 0.1 percent last month, as consumers used extra cash from their federal tax rebate checks for daily necessities, the Commerce Department reported Tuesday.
The gains were the weakest in four months, the report said. Excluding slumping auto sales, which dropped to a two-year low, core retail sales rose by 0.8 percent.
While clothing and accessory store sales remained flat, health and personal care store sales picked up.
According to the National Retail Federation, the economic downturn has more shoppers focusing on necessities, despite the injection of nearly $50 billion in tax rebates from the federal economic stimulus plan.
"Many consumers have been practical with their tax rebate checks, using them to offset higher prices of gas and food," Rosalind Wells, the trade group's chief economist, said in a statement.
Jobless Claims Up
The number of new claims for unemployment benefits rose by 18,000 last week to 366,000, the Labor Department reported Thursday.
The advance seasonally adjusted unemployment rate the previous week inched down by 0.1 points to 2.3 percent, representing about 3.122 million Americans filing jobless claims.
The biggest gains in new claims last week were reported in Michigan, Ohio and Wisconsin, while the biggest declines were in New Jersey, California and Massachusetts.
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