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Strategies & Market Trends : US Economic Trend Analysis
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From: gpowell6/7/2008 2:21:28 PM
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Economic data is indicating prices for goods normalized for changes in productivity have risen to a level not seen since the mid 70's. This is not a good sign, but unlike the 70's expenditure on goods is a much smaller part of the average households spending. The source of the rise is not monetary, but rather pure demand pressure, which itself is amplified by the falling dollar.

Notwithstanding that goods constitute a smaller portion of the overall expenditure pie, It's likely the US will undergo a recession soon as households adjust to their lowered standard of living. I'd expect the FED to act quickly should there be an attempt by domestic labor to increase their compensation - as that would in the end only exacerbate the increase in goods prices.
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