Cleaning & Restoration Breaking News

Inflation Predicted to Jump 2.5 Percent

WASHINGTON - Fed by escalating energy prices and a rebounding economy, inflation will pick up more this year than previously thought, a group of economic forecasters says.

In its latest economic outlook, the National Association for Business Economics estimated that inflation, as measured by the Consumer Price Index, will rise by 2.5 percent in 2004. The index is the government's most closely watched inflation barometer.

If the new projection being released Monday should prove accurate, it would mark a sharp jump from the index's 1.9 percent increase in 2003 and would represent its largest increase since a 3.4 percent advance in 2000.

The association's new inflation estimate for 2004 is higher than its previous estimate, made in February, of a 1.8 percent rise.

"Rising prices of energy and other industrial commodities are contributing to the higher inflation, but so too is robust growth," said the group's president, Duncan Meldrum, chief economist at Air Products and Chemicals Inc.

Recent economic reports suggest inflation is stirring from its slumber. Other data show businesses are beginning to step up hiring, and industrial activity is brisk. All these lead more economists to predict that the Federal Reserve may raise short-term interest rates next month.

Other analysts still believe the Fed's first rate increase in more than four years will come in August or later. The bank's crucial short-term rate is now at a 46-year low, 1 percent.

Inflation is creeping up for a number of reasons, economists say. Some companies, which have had to keep a lid on price increases during the economic slump, are finding it easier to raise prices in a rebounding economy.

  • Rising energy costs are pushing up prices for goods and services, including air travel and food.
  • Higher prices for some commodities, such as steel, also are a factor in some cost increases, analysts say.

    Inflation's upward movement signifies a big change in the pricing climate from a year ago. Then, the Fed worried about the possibility of deflation, a prolonged and widespread price decline. Still, a 2.5 percent increase in inflation would be considered historically rather low, no threat to the economy.

    The economics association's forecasters also believe that for all of 2004 economic growth will be higher and the unemployment rate lower than previous estimates.

    They believe the economy will expand by 4.7 percent this year, up slightly from a previous estimate of a 4.6 percent rise and exceeding the 3.1 percent advance in 2003. The new estimate, if borne out, would mark the best economic growth since 1984.

    The unemployment rate, meanwhile, is expected to fall to 5.5 percent this year. That's better than the previous forecast of a 5.6 percent rate and an improvement from the 6 percent jobless rate in 2003.

  • Did you enjoy this article? Click here to subscribe to i Cleaning Specialist Magazine.

    You must login or register in order to post a comment.

    Multimedia

    Videos

    Image Galleries

    The 2014 Experience Conference and Exhibition

    A look in photos at the 2014 Experience Conference and Exhibition, which was held from April 24-26 at the Embassy Suites Convention Center and Spa in Frisco, Texas.

    Podcasts

    Beginning April 21, Google will start judging websites based on their mobile friendliness. What exactly does this mean to you cleaning website? Find out in the latest edition of The Hitman Advertising Show, which will also cover tips and suggestions on getting mobile compliant.
    More Podcasts

    ICS Cleaning Specialist Magazine

    CoverImage

    2015 April

    The April ICS issue features content on concrete polishing, green cleaning, air duct cleaning, injection sprayers and new products.

    Table Of Contents Subscribe

    Janitorial Work

    In addition to residential and commercial carpet cleaning, do you do any janitorial work on the side?
    View Results Poll Archive

    THE ICS STORE

    FinalCover.gif
    The Carpet Cleaner's Book of Unlimited Success! (ebook)

    Don’t worry about the recession or about your competition.  Now you can be the owner of over 400 ways for carpet cleaning professionals to make more money and get more jobs!

    More Products

    ICS DIRECTORY AND BUYING GUIDE

    Director_Buyer.jpgThe premier resource and reference guide for the cleaning and restoration industries.

    Click here to view

    STAY CONNECTED

    facebook_40.png twitter_40px.png youtube_40px.png

    TRUCKMOUNT EQUIPMENT AND ACCESSORIES GUIDE

    Truckmount.jpgEquipment listings and specifications from the leading industry manufacturers.

    Click here to view