Prices jump more than expected
NEW YORK – Prices paid by consumers rose faster in November, lifted by a spike in the price of gasoline, as the government's key inflation measure came in higher than Wall Street forecasts.
The Consumer Price Index, the key measure of inflation on the retail level, rose 0.8 percent in the month, up from the 0.3 percent rise in October. Economists surveyed by Briefing.com had forecast a 0.6 percent rise in overall prices.
It was the biggest jump in prices since September 2005, when gasoline prices surged higher in the wake of Hurricane Katrina. There was a similar impact of higher gasoline prices this time.
The report showed overall energy prices up 5.7 percent, with gasoline up 9.3 percent. In addition food prices, another recent driver of inflation, were up 0.3 percent.
Senate OKs more power for energy regulators
WASHINGTON – The Senate voted Thursday to give federal regulators increased authority to monitor electronic energy markets and protect against market manipulation.
The provision, put into a farm bill, was aimed at closing a loophole created seven years ago largely at the request of the Enron, that exempted electronic markets for large traders from government oversight.
The Senate by unanimous voice vote agreed to include in the farm legislation a provision that gives the Commodity Futures Trading Commission increased authority to detect and prevent manipulation in electronic energy markets, create audit trails and require greater transparency in transactions.
The provision was offered by Sen. Dianne Feinstein, D-Calif, Sen. Carl Levin, D-Mich., and Sen. Olympia Snowe, R-Maine.
Fannie: Home prices to sink in '08
NEW YORK – Average home prices will decline another 4 to 5 percent in 2008, according to Fannie Mae Chief Executive Dan Mudd.
Mudd, speaking at Fannie Mae's first shareholders meeting in more than three years, said the mortgage-finance firm does not see a turnaround in the U.S. housing market until 2009 "at the earliest."
The median price of an existing home sold jumped 43 percent between 2001 and 2005, but year-over-year price declines started in late 2006 and are expected to fall almost 2 percent this year, according to the National Association of Realtors. That would mark the first year with a decline in prices.
The run-up in prices caused a problem with affordability in many markets, Mudd said, and prices need to retreat in order to restore affordability before a housing recovery can begin.
Mudd blamed the growth in subprime mortgages that sparked the current credit market crisis on the affordability problems during the boom years.