Unemployment, Inflation, Oh My!

It appears that the labor market is continuing its upward turn. In early September, the number of Americans filling for unemployment benefits dropped. The state unemployment applications dropped by approximately 6,000 to come up with an adjusted total of 275,000 for the week ending September 5^th. This is the reported 27^th straight week that the rates have been steadily the 300,000 mark. This upward trend is said to reflect a strengthening labor market.

“Consistently low readings for initial and continuing jobless claims suggest that the separations side of the labor market remains healthy, and we see little reason to expect a meaningful shift in labor market dynamics in the near term,” said Jesse Hurwitz, an economist at Barclays in New York. Aside from the strengthening labor market, the Labor Department is also seeing the import sector is also doing well. Import prices have fallen by 1.8 percent during the month of August. The price drops seen in August have been the largest that the market has seen in seven months.

With a large decrease in import prices, one can speculate that the U.S. dollar is strong and a global demand continuing to put the downward pressure on imported inflation. These declines are stretched across 12 of the past 14 months. With the continuous 12 months through August, import prices have decreased by 11.4 percent, one of the largest drops that have been seen since late 2009.

Alongside the import prices, unemployment rates are at an all time, of the past seven years, low of 5.1 percent, which is in range that majority of the Federal Reserve officials would correlate with low rate of inflation. The consistent decrease in the inflation rate is a reflective image of the U.S. dollar. The dollar’s impacts has increased almost 17% compared against competitive currencies since June of 2014. The market and inflation rates seem to be looking up and the U.S. economy can almost be referred to as “steady.”

Article: http://www.nytimes.com/2015/09/11/business/economy/us-jobless-claims-decline-import-prices-fall-too.html?ref=economy&_r=0

Article #2: Falling Gas Prices

Labor Day weekend cruises were in full-effect for Americans this year. Gas prices were at all time low almost as low as it was when “George W. Bush was in his first term as president.” Since June of this year, gas prices have been steadily decreasing; hitting an average of $2.40 per gallon, almost a whole dollar less than it was last year. However, Hawaii, California, Nevada and Alaska fall short of that trend and still have gas prices that hover over $3.

Why are gas prices so cheap now-a-days? The gas prices have dropped consequently from the drop in oil prices. Oil is now traded at $46 a barrel compared to an almost doubled rate last summer. In previous years, when the prices began to fall OPEC would intervene and halt production. However, this year, the world’s largest oil suppliers are still pumping in midst of their new strategy to pressure American oil producers. Another factor that has contributed to the falling oil prices is the pending sanctions deal with the Iran.

Although the American consumer loves the idea of gas prices beginning to dwindle, there is a harsh reality to our pleasures. With the steadily falling prices, jobs in U.S. oil companies have had to implement job cuts, approximately over 86,000 cuts. These job cuts are a direct effect of the stagnant fluctuation for supply and demand for oil stemming from June of 2014.

The drastic drop in gas prices also poses the question of if this is just a phase, but experts believe that the prices will continue to drop. According to the Energy Information Administration, a government agency that tracks the oil sector, the national average will conclude at $2.11 per gallon at the end of this year. The projected supply and demand is expected to remain constant to how it is now. Experts also believe that gas prices could possibly even drop to $2 per gallon by this Christmas.

Barbieri, Rich, and Jackie Wattles. “The Return of Cheap Gas.” 6 Sept. 2015. CNN Money. Web.

Article #1: Burger King and McDonald’s Collaborate?

Early last week, Burger King had made a proposition to McDonald’s to join forces in the fast-food world. Burger’s King’s proposed to combine ideas and create the McWhopper, a unlikely combination between the two rival burger giants’ signature burgers, the Big Mac and the Whopper. The news of this opportunity went viral in the Chicago Tribune.

In their proposition, Burger King suggested that the hybrid burger be sold in one, being Atlanta – a common ground for both, in pop-up store. The proposed date was September 21, with all proceeds going towards the nonprofit Peace One date. Aside from releasing the ad, Burger King also went ahead and created a website that showcased its proposal and also leaking a possible recipe for the McWhopper.

Soon after the Burger King stunt went viral, McDonald’s CEO sent a kind message on Facebook. He commended their efforts for trying bring the forces together for a greater good, but subtly denied the offer, even added a little bit of retaliation by stating that “a simple phone call will do next time.”

Chew, Jon. “Burger King Wants McDonald’s Help to Make the ‘McWhopper.'” Time Magazine. (2015). print.