Consumer Price Index

Stagflation
A condition of slow economic growth and relatively high unemployment - a time of stagnation - accompanied by a rise in prices, or inflation.

Stagflation occurs when the economy isn't growing but prices are, which is not a good situation for a country to be in. This happened to a great extent during the 1970s, when world oil prices rose dramatically, fueling sharp inflation in developed countries. For these countries, including the U.S., stagnation increased the inflationary effects.


A general decline in prices, often caused by a reduction in the supply of money or credit. Deflation can be caused also by a decrease in government, personal or investment spending. The opposite of inflation, deflation has the side effect of increased unemployment since there is a lower level of demand in the economy, which can lead to an economic depression.

Declining prices, if they persist, generally create a vicious spiral of negatives such as falling profits, closing factories, shrinking employment and incomes, and increasing defaults on loans by companies and individuals. To counter deflation, the Federal Reserve (the Fed) can use monetary policy to increase the money supply and deliberately induce rising prices, causing inflation. Rising prices provide an essential lubricant for any sustained recovery because businesses increase profits and take some of the depressive pressures off wages and debtors of every kind.


Inflation
The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling.

As inflation rises, every dollar will buy a smaller percentage of a good. For example, if the inflation rate is 2%, then a $1 pack of gum will cost $1.02 in a year. Most countries' central banks will try to sustain an inflation rate of 2-3%.
How is the CPI calculated?
The CPI is a product of a series of interrelated samples. First, using data from the 1990 Census of Population, BLS selected the urban areas from which data on prices were collected and chose the housing units within each area that were eligible for use in the shelter component of the CPI. The Census of Population also provided data on the number of consumers represented by each area selected as a CPI price collection area. Next, another sample (of about 16,800 families each year) served as the basis for a Point-of-Purchase Survey that identified the places where households purchase various types of goods and services.

perspective on how much money $87,000,000,000 is.

Debt; The sum of all previously incurred annual federal deficits. Since the deficits are financed by government borrowing, national debt is equal to all government debt outstanding.
The balance of trade (or net exports, sometimes symbolized as NX) is the difference between the monetary value of exports and imports in an economy over a certain period of time. A positive balance of trade is known as a trade surplus and consists of exporting more than is imported; a negative balance of trade is known as a trade deficit or, informally, a trade gap. The balance of trade is sometimes divided into a goods and a services balance; especially in the United Kingdom the terms visible and invisible balance are used.Well, the US trade deficit is up again, and you can be sure the news was accompanied by a lot of moaning and groaning and soul-searching. The main reason that all the media and the majority of Americans freak out over large trade deficit numbers is that they look at the American economy as a large bank vault with a fixed supply of money on the shelves. They reason that if more money is going out of the vault to buy things than is going back in from sales, then eventually the vault will go empty and we will be bankrupt. Either implicitly or explicitly, those who fear trade deficits perceive the trade imbalance to be red ink, something bleeding out of a fixed supply.
That's more or less what's going on right now among international finance experts. The crime in question is the U.S. trade deficit, which ... reached an amazing $805 billion last year. The mystery is how we've been able to run huge deficits ... with so few visible adverse consequences. And the future of the U.S. economy depends on which of two proposed solutions to the mystery is right. Here's the puzzle: the trade deficit means that America is ... spending far more than it earns. ... To pay for the excess of imports over exports, the United States has ... borrowed more than $3 trillion just since 1999. If Mr. Gros is right, the true position of the U.S. economy isn't as bad as you think — it's worse. The true trade deficit ... isn't $800 billion — it's more than $900 billion. And America's foreign debt ... is at least $1 trillion bigger than the official numbers say. Of course, optimists have a comeback: if things are really that bad, why are so many foreign investors still buying U.S. bonds? ... But I have two words for those who place their faith in the judgment of investors...: Nasdaq 5,000.

the Fed's recent actions

WASHINGTON - Securities regulators haven't ruled out legal action over potentially misleading comments about the financial health of Bear Stearns made days before JPMorgan arranged to buy the struggling investment bank.The agency's enforcement division has written a letter to JPMorgan Chase & Co., which agreed to acquire Bear Stearns at the fire-sale price of $260.5 million Sunday in an emeLast Monday, when rumors started to circulate on Wall Street that Bear Stearns was short on liquidity and might not have enough cash to do business, the firm's executives tried to tamp down the negative chatter with a news release. It said Bear Stearns' "balance sheet, liquidity and capital remain strong. ... There is absolutely no truth to the rumors of liquidity problems that circulated today in the market."rgency deal backed up by the Federal Reserve.

the Fed's recent actions

New York Times article about Jerry Yang

SAN FRANCISCO — One of the first questions that Jerry Yang and his top lieutenants pondered after he became chief executive of Yahoo last summer was whether the company could remainMr. Yang, a cerebral, highly analytic executive who, by all accounts, cares deeply about the company he helped build and its workers, appears to have run out of time to answer those questions.It took until last week, more than six months into Mr. Yang’s tenure, for him to announce that Yahoo would cut 1,000 employees. At the same time, however, Mr. Yang warned investors that he had decided to make larger-than-expected investments in the business.“We are still trying to do too many things, and fund them in a way that we need to in order to win,” said a senior executive who has grown disillusioned with Mr. Yang. “With the stock at $24 or $25, we’d be having a very different conversation now. But there were decisions made that were naïve that have left us in a position where we can’t control our destiny.”

comparison of their policies for the US Economy.

Hillary ClintonClinton's economic platform, though aggressive, is well-thought out, detailed and grounded in many of the current economic programs. She is the only candidate that has stated a commitment to a balanced budget. Since the budget deficit is a large contributor to the declining dollar, high oil prices and inflation, its elimination is critical to the long-term health of the U.S. economy. For these reasons, Clinton's platform would be most beneficial to the economy.
Barack ObamaObama's economic platform is visionary, yet does not give enough detail to determine if it is feasible. Without a commitment to a balanced budget, it could be detrimental to the economy.

Recession?

1)RECESSION is the state of the economy declines; a widespread decline in the GDP and employment and trade lasting from six months to a year.2)Is the American economy heading toward a recession? ABC World News business correspondent Betsy Stark talks about the disappointing report that the nation only added 18,000 jobs last month.
Bill Blakemore: Betsy, is 18,000 far off the mark of what is considered healthy?
Betsy Stark: Oh, it’s way off the mark of what’s considered healthy. You need about 100,000 jobs to just absorb all the new people who come into the job market every month looking for work. So this really is a bleak number. And the other thing that happened was there was a 3/10th of a percent jump in the unemployment rate to 5%. So put those two things together and it’s really flashing recession3)I don't think that us is entereing because the estate of decline is no enough to tell that the nation is recession.