Consumer Confidence Index at 50 Year Low

The economic research organization The Conference Board issues releases of the US Consumer Confidence Index, and its recent June release has confirmed a dip in the degree of optimism consumers have in the economy. Read more

Inflation Nation

Talk of inflation has been circulating amongst Federal officials, in anticipation of the central bank’s next policy-making committee meeting scheduled for June 24. President James Bullard of St. Louis’ Federal Reserve Bank, in a speech conducted Wednesday, has stated that inflation continues to remain a primary concern for the central bank. To some, this presents a hint of the Fed’s intentions for future monetary policies.
According to David Goldman of CNNMoney.com, “the Fed is now more concerned with keeping prices from soaring out of control than an economic slowdown.”
The Central bank has seen to a lowering of key federal funds seven times as of September and many Fed officials have been eager to offer their input on the Fed’s situation. According to James Bullard, the Federal Bank should leave interest rates unchanged, while Federal Chairman Ben Bernanke openly supports a strong dollar and President Timothy Geither of NY’s Federal Reserve Bank endorses a tighter monetary policy.
Whether the bank’s lowering of funds benefits the economy remains in dispute.
“Although some believe the series of rate cuts have helped prevent the credit crunch on Wall Street from deepening further, the cuts have also contributed to the weakness in the dollar and rising commodity prices,” says Goldman.
So how has inflation presented itself in our everyday lives? Although many would express concern about increasing energy and food prices, according to a speaker CNBC of Yahoo Finance “many consumers may not notice that they’re getting a break on some items they buy every day.”
The Consumer Price Index supports the expected rise of gas and food prices, but general prices have shown little change. Surprisingly, many items have also shown price decreases. The Consumer Electronics Association has stated lower prices for 2008 on products such has cell phones, desktop computers, plasma TVs, and DVRs. Taking into consideration the dropping prices of women’s apparel, theme park tickets, toys, and dinnerware, an additional outlook on the real effect of inflation is brought into light.

CNBC Video

http://www.cnbc.com/id/15840232?video=716254113&play=1

Rental Market Remains High and Strong

The research company RealFacts has released a report for 2008 affirming the strength of the rental market in the Silicon Valley. This rental research company reveals quarterly statistics on rental market prices and occupancy rates (The percentage of available rental space that is actually rented and in use in a given building or community). Although the rate of increase in occupancy rates have lowered somewhat, the yearly increase raced in at second largest in the state, led by the San Francisco-Oakland-Fremont region.

According to RealFacts director of sales and marketing Gerald Cox, the fact that Santa Clara County and San Francisco have high occupancy rates despite a recessionary downturn in the economy is a sure fire “sign of local markets remaining strong.” The leaders in highest rental markets of California were San Jose-Sunnyvale-Santa Clara, at $1,660; Los Angeles-Long Beach-Santa Ana, at $1,651; Santa Cruz-Watsonville, at $1,606; San Francisco-Oakland-Fremont, at $1,596; and Oxnard-Thousand Oaks-Ventura, at $1,552.

Other economists agree that such a high occupancy rate such as San Jose’s 96.5 percent signifies a robust economy. However, “The drop in housing prices and low interest rates don’t appear to be enticing people to leave rentals in favor of buying a home,” says Chris O’Brien of MercuryNews.

The Silicon Valley remains pricey for both homebuyers and renters. According to Sue McCallister, who monitors the Silicon Valley Economy, a worker in Santa Clara County needs to make nearly $24.87 an hour in order to afford a basic two-bedroom rental in the area. Says Cox of RealFacts, “many who are entering the rental market are being affected by foreclosure and vacant houses will become rental properties.”