[jsfg_cinti] ARTICLE: Inflation moderates in 2006, wages up

Dear JSFG Folks,

Here's some good economic news.  Note the analyst
quote that:

"Things have finally come together for workers after a
long period of tough conditions," said Mark Zandi,
chief economist at Moody's Economy.com.

Stay positive.  Stay focussed. Good luck!

Regards,
Lance

-----------------------------------------------
http://news.yahoo.com/s/ap/economy

Inflation moderates in 2006, wages up
By MARTIN CRUTSINGER, AP Economics Writer 
Thu Jan 18, 8:18 PM ET

WASHINGTON - Inflation in 2006 eased to the slowest
pace in three years as consumers finally got some
relief on energy and medical bills. In further good
news, inflation-adjusted wages rose at the fastest
clip in nearly a decade.

The Labor Department reported Thursday that the
Consumer Price Index climbed by 2.5 percent last year,
the best showing since 2003 and nearly a full
percentage point lower than the 3.4 percent jump in
2005.

...

The slowdown in prices last year occurred as workers'
wages, which have lagged in this recovery, began to
show bigger gains.

That combination of lower inflation and faster wage
growth translated into an increase in
inflation-adjusted weekly wages of 2.1 percent for the
80 percent of the work force in nonsupervisory
positions.

...

Analysts attributed the improvement in real wages in
2006 to a tighter job market that forced businesses to
offer higher salaries to attract workers. They
predicted further gains.

"Things have finally come together for workers after a
long period of tough conditions," said Mark Zandi,
chief economist at Moody's Economy.com.

...

David Wyss, chief economist at Standard & Poor's in
New York, predicted that consumer prices would rise by
just 1.9 percent this year, reflecting a continued
retreat in energy prices.

"We think lower oil prices and a slower economy will
keep inflation under control," he said.

...

Also helping restrain inflation last year was the
sharp slowdown in medical prices, typically one of the
fastest growing expense for consumers. For 2006,
physician charges rose by just 1.7 percent, the
smallest increase in 57 years. Prescription drug
prices rose by just 1.9 percent, the smallest gain in
33 years.

Analysts credited the move by Wal-Mart to introduce a
$4 generic prescription drug program, which was
matched by other big retailers, to helping hold down
drug costs.

...

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