Interesting Inflation News Links (March 19, 2009)

* Consumer prices rise by most in 7 months (Martin Crutsinger)

WASHINGTON Consumer prices rose in February by the largest amount in seven months as gasoline prices surged again and clothing costs jumped the most in nearly two decades.

* Unemployment hits two million but public sector sheltered (Harry Wallop, Telegraph)

More than 138,000 people began claiming the Jobseekers’ Allowance in February, taking the total number of claimants up to 1.39 million, the Office for National Statistics said.

* Rising prices means recession not deepening, economists say (Jack Katzanek, Press-Enterprise)

A report about higher prices for consumer goods bringing sighs of relief in economic circles is counterintuitive, but higher prices in February does ease some fears that the recession could be deepening.

* Economists React: Whats Going On With Apparel, Cars? (Phil Izzo, Wall Street Journal)

Consumer inflation in the first two months of the year is starting to look more normal than the extremely depressed numbers that printed in the fourth quarter of last year. The last two readings on core inflation have almost certainly given the Fed some comfort, easing fears that last quarter s figures presaged a quick slide into deflation. Looking through the details, much of the increase thi…

* Real Cost of Living Index falls 4.3pc (Telegraph)

All nine members of the Bank of England’s Monetary Policy Committee voted this month to launch a 75 billion pound asset-buying programme and to cut interest rates by 50 basis points to a record low of 0.5 per cent.

* Donaldson’s alcohol proposal deserves attention, say economists (Sally Gainsbury, Health Service Journal)

For economists, the fact that excessive alcohol consumption has negative consequences not just for the drinker but also people around then suggests the problem is one that could be suitable for addressing through the control of prices.

* Indian inflation nears zero (James Lamont, The Financial Times)

India is on course for a deflationary dip after data on Thursday showed the countrys wholesale price index rose by only 0.44 per cent earlier this month in spite of government efforts to stimulate the economy.

* Fed’s Gamble: Buying Long Bonds (Wall Street Journal)

The Federal Reserve’s controversial decision to buy long-term Treasury securities is a step Chairman Ben Bernanke has been contemplating for much of this decade in thinking about how to prevent a return of deflation and depression.

* Fewer bid for rights to drill in Gulf (Daniel Whitten, Bloomberg News)

Royal Dutch Shell and BP were among the winners of oil and gas drilling rights in a Gulf of Mexico sale that brought in $703 million, a drop from the record $3.7 billion a similar sale brought last March.

* Roundtable discusses recession (Ball State Daily News)

Members of the Economic Roundtable Forecast determined Wednesday that this recession is not as bad as the last, but resulting inflation could prove more damaging in the long term.

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