Yesterday’s results for July’s inflation numbers are in, and they’re not particularly heartening. July showed a 1.2% price increase for consumer goods (for the month) which is the highest single month increase in a loooong time. Even removing the food and energy portion, the increase was still .7%, which was about three times what Wall Street analysts were expecting it to be.

We’ve entered that tough spot now where the stimulus check money is pretty much gone, and any second stimulus check is likely to materialize after the presidential election. So what do we do for the next few months?

Weathering the Storm

Some good news is that the price of crude oil has dropped about $30/barrel over the last month or so. That being caused by many Americans cutting back on travel, planning out their routes better, and switching to more fuel-efficient vehicles and modes of transportation. Supply and Demand is forcing the prices back down somewhat.

The bad news (somewhat bad) is that there’s not much more the American public can do to lower the fuel demand. People still have to get to work and back, and trading in your gas-guzzling SUV for a more gas-efficient small car or hybrid is becoming more difficult, if not downright impossible.

Housing continues to be a key economic sticking point, as expected. New housing starts are significantly down for the month, while the median price of homes has dropped ~8% from a year ago. Foreclosures are continuing at a steady pace, and it doesn’t appear that lenders are taking the government’s ’suggestion’ about re-working the loans (and taking a partial loss) too seriously yet.

A Ray of Sunshine

But even with all that, it still seems like things aren’t quite as bad as everyone predicted. It’s tight for families with low incomes, and those that have seriously overextended themselves, but it’s survivable so far.

The financial sector keeps putting out reports of losses, but many of them are ‘less than expected’. Which in a weird way, gives the Market some confidence. I guess if you expected to lose $20 Billion, and only lost $12 Billion, that can be construed as a ‘good thing’ (if you squint hard).

I Can See Clearly Now, the Rain Has Gone

No grand prognostications here, I will say that once we DO finish out this recession, I’m betting that the overall health of the economy is going to be better. The weaker companies and industries are going to either close, consolidate, or be bought by stronger, more well-run competitors, and the ones left standing will be more ready and able to compete on a world-wide playing field, if they aren’t already.

Kind of a Darwin Award for business. Just hope my company is one of the survivors.

What do you think of the current economy? Leave us a message and let us know!