Business Highlights – Biodiesel boom pushing up grocery prices
Prices on everything from cereal and milk to soft drinks and red meat are on the upswing, due partly to the ethanol and biodiesel boom which is pushing up prices for corn and other commodities. High energy prices also remain troublesome, regardless whether gas tops $3 a gallon, and clothing costs are up this year too.
All that explains why Federal Reserve policymakers cited “uncomfortably high” inflation readings as being their biggest worry, according to minutes released Wednesday of their private discussions last month.
The government reported Friday that wholesale prices rose 1 percent in March, mostly because of the biggest jumps in energy (3.6 percent) and gasoline (8.7 percent) prices since November.
Prices were flat for the month on a wider range of goods that excludes food and energy.
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NEW YORK (AP) ? Wall Street closed out a bumpy week with a moderate gain Friday as investors, heartened by new inflation data, bought optimistically ahead of next week’s rush of earnings releases. The Dow Jones industrials had their 10th advance in 11 sessions, and all the major indexes closed out the week with gains.
After some wavering early in the day, investors ultimately decided to extend the climb Friday, encouraged by the Labor Department’s report that its Producer Price Index was flat in March, once volatile prices for energy and food were stripped out. Including energy and food, wholesale prices rose 1 percent, a smaller rise than the 1.3 percent jump in February.
The stock market’s advance was dampened only slightly by the University of Michigan’s consumer sentiment index, which weakened in early April and raised worries that consumers could rein in spending. The report also suggested that consumers are more uneasy about inflation than they were last month. Inflation is a concern for the stock market if it gets so high that the Federal Reserve raises rates to curb it.
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WASHINGTON (AP) ? The global economy should turn in an energetic performance this year, even though its biggest player, the United States, is expected to experience its weakest growth in five years, according to a new International Monetary Fund forecast.
In its latest World Economic Outlook, the IMF is projecting the world economy to grow by 4.9 percent this year and next. While that would be a moderation from last year’s 5.4 percent advance, it would still represent a remarkably healthy showing, analysts say.
The U.S. economy is expected to grow by 2.2 percent this year, which would be the slowest since 2002, when it was recovering from a recession. Last year, the U.S. economy managed to expand by 3.3 percent, a two-year high even as it coped with a painful housing slump.
In its fresh forecast, the IMF downgraded its projection for U.S. growth this year to the current 2.2 percent gain, from a 2.9 percent increase that had been forecast in September.
The United States has been dealing with strain from a housing market that started to crumble last year after a five-year boom.
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NEW YORK (AP) ? Spring looks bleak for the nation’s retailers. After robust sales in March, there are signs that consumers are already spending less. And a trifecta of problems ? rising gas prices, a rougher housing market and the specter of higher interest rates ? are likely to make the retail business even tougher in the months ahead.
Although many stores reported Thursday that they had surpassed expectations last month, several warned of upcoming disappointments.
Wal-Mart Stores Inc., whose customers cut back on shopping when gas prices were high last year, said April’s selling environment will be tough, while Federated Department Stores Inc. said its first-quarter sales will come in at the low end of expectations. Children’s Place Retail Stores Inc. said its first-quarter earnings per share would be roughly flat with last year’s, missing Wall Street estimates.
The nation’s retailers were clearly helped by a number of temporary factors in March. The arrival of warmer weather following an unusually cold January and February helped retailers like Wal-Mart recover from a slow start to the spring selling season.