The recovery of our economy will not derail because of the increase in commodity prices. It is unlucky for consumers because everyday commodities like fuel and food have increasing prices. However, eventually the economy will stabilize.
Saturday, April 16, 2011
U.S. Economy: Trade Deficit Narrows Less Than Forecast
U.S. trade deficit narrowed less than forecasted in February, which indicates how the rising commodity prices have affected the economy. Prices of imported goods, especially oil, rose the quickest this past month. The rapid increase in commodity prices over the past year is because of the rise in global demand and the decrease in global supply. Increases in prices in commodities, such as oil and food, have hurt consumer spending. This is unfortunate because food and fuel account for about 70 percent of the economy.
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4 comments:
also because so many prices in the market are affected by oil and food prices we can expect to see some inflation that will drive the overall prices in our markets up where they will stay. the price of oil is also expected to see a sharp increase over the next few years.
According to CNN average gas price in Europe is above $5 per gallon. So, I think we should be getting used to high gasoline prices. With the world's energy demands increasing I don't see oil prices coming down.
Oil being a scarce natural resource with high demand will naturally have a high price. The oil supply was abused and now that the world is running out of oil we should not count on the price oil permanently decreasing. What will most likely happen is that the price of oil will increase given that there will be a lower supply and the demand will be around the same.
I don't really agree with what VB just mentioned. One of the reason for higher gas price in Europe is because all European countries are under the Kyoto Protocol,which limit their CO2 emission.As a reslut, it will be more costly to burn a gallon of gas in Europe than in the United States, because the U.S. is not under Kyoto Protocol.
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