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The Paramus Post - Greater Paramus News and Lifestyle Webzine
Sunday, September 25 2016 @ 04:52 AM EDT

Prices Rise Most in Months, Easing Deflation Fears

Modest growth in consumer spending at year end is prompting employers to maintain current employment levels and reduce the pace of firing. However, with less-than-stellar consumption, still stalling near 2%, businesses have little incentive to meaningfully ramp up hiring, at least in the near-term. The volatile employment gains in the final quarter of the year underline the need to remain cautiously optimistic and reinforces the Fed's decision for a minimal reduction in QE while we wait for more evidence of further strength in hiring.

Thanks to upward costs in fuel and housing, consumer prices rose more than expected at the end of 2013, up 0.3%. This was the biggest monthly gain since June and will certainly help ease concerns at the Fed of a continued decline in inflation. Although a minimal rise, many committee members will argue this as evidence inflation is reversing course back towards the Federal Reserve's target, further justifying a reduction in monthly bond purchases at a faster pace.

by Mel Fabrikant

Mel is a longtime Paramus resident and has belonged to many Paramus organizations. He is responsible for bringing the Scholarship Show to town and seeing to it that the initial presentation went over well. His five offspring were brought up through the Paramus school system. In addition, he is a longtime Paramus Rotary member.

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