US Economy Grows, Despite Oil Fears
Thu, May 29 2008, 18:59 GMT
by Andrei Pehar
Both the US Dollar and the Dow showed remarkable resilience
despite more scary figures out today from the oil sector. Besides setting
a new high above $136 last week, today's inventory numbers showed yet another drop,
this time by 8.8 million barrels (the previous month saw a decline of 5.4
million).
The GDP price index held steady at 2.6% for the quarter, meanwhile the
preliminary GDP for the same period rose to 0.9%, up from 0.6% the prior
quarter. While many signs still point to a poor rate of growth for the
overall US
economy this year, there are also indications that the concern may slowly begin
to shift from recession to inflation, as we've already seen in other parts of the world.
Where the danger comes in is that if consumers accept these prices, without changing their driving habits, then oil prices (as well as prices for other commodities) could well find support in their current drop and seek to find even higher highs in the not-too-distant future.
