Unhappy States as prices rise

A MEASURE of financial misery is up in the US, according to figures out yesterday showing unemployment and inflation on the rise.

Annual Consumer Price Index (CPI) inflation increased to 3.8 per cent. That figure is added to the unemployment statistics – currently 9.1 per cent – to create the “misery index”, which now stands at 12.9, its highest since the 1980s.

Manufacturing fell in New York state for the fourth consecutive month, according to the Fed’s empire state manufacturing index, out yesterday. The general business conditions index edged down from -8.7 to -8.8, as shipments and inventories both plummeted.

Better news came from August’s industrial production statistics, which were also released yesterday by the Fed. Output increased 0.2 per cent month-on-month, adding to July’s rise of 0.9 per cent. In the year to August, it increased by 3.4 per cent.

However, that is not enough to brighten the overall picture, say analysts.

“Prices are rising faster than expected and output growth is minimal, which highlights the spectre of stagflation in the world’s largest economy, and investors know it,” said Benjamin Wilson from the Centre for Economics and Business Research.