January Producer Prices Fell 0.8% on Widespread Lower Prices, Margins

Probably the most interesting economic report of those released last week was the January report on the Producer Price Index from the Bureau of Labor Statistics, which showed the headline producer price index for final demand had fallen by a seasonally adjusted 0.8% for the month, after falling 0.2% in both November and December, and which left year over year wholesale inflation unchanged.  Both the monthly decrease and the year over year change were the greatest drop that this new PPI index has ever shown in the two years

Gauging the Impact of December Inventories on 4th Quarter GDP Revisions

Two more reports from last week that we want to look at were on December sales and inventories for different sectors of the economy.  We want to know how they might affect 4th quarter GDP revisions.  Here's a simplistic way to think about how sales and inventories in the economy affect GDP: If the economy consumes 10 apples at a dollar a piece in November, and 11 apples at 90 cents each in December, sales have gone down by 1% in December but monthly GDP is up 10%.  If there are 10 apples left on the shelf in both months, reported inventories will go down 10% in December, but

Feed the Rich and Starve the Poor (Cont.)

It didn't take long before the new GOP House began passing a series of deficit-hiking tax cuts that will primarily help the rich at the expense of everybody else. Rep. Paul Ryan (R-Wis.), the new chairman of the Ways and Means Committee (which writes tax legislation), wants to make some previous tax breaks permanent — arguing that Congress has previously extended certain tax breaks before.

Bottom Up Organic Economic Growth

There are those (like Stephen Moore at the Heritage Foundation) who have persistently been saying for years that the U.S. should lower it's corporate tax rate to be more globally "competitive". They have repeatedly said that America has the highest [statutory] corporate tax rate in the entire world — although, in reality, American multi-national corporations usually have a much lower "effective" tax rate, because of all the Congressionally approved "loopholes" in our tax code.