U.S. Economy: License to Recover

Although already officially declared over, many Americans are still reeling from the effects of the recession, or even double dip recession as it has been called. August 2010's producer price index and jobless claims were mildly good news. September's report on the same is due out this Thursday. So this week, economists are as anxious as a teenager about to get his driver's license.

The report of jobless claims provides insight not only to how many Americans are not employed and looking for work, but is also a measure of underlying market trends. The August number (reported in September) was slightly down, even though analysts expected it to be slightly higher. So it was good news - times two.

The produce price index is adjusted for seasonal, weather, and other unique conditions. With seasonal adjustments, the farm commodity measure was up in the August numbers, even more than analysts had predicted. Another good omen for the economy. Some experts view this as a measure of inflation, others consider it simply a measure in the volatility of commodity prices.

While economic recovery is not going to be a straight upward arrow, the August numbers were encouraging. And like the nearly licensed-to-drive teenager, a few more restless nights and soon we'll know if September's numbers will confirm the story of continued economic recovery.

Sample Test Question: Task 2-A-2

The producer price index (PPI) may be BEST used by supply management professionals to do all EXCEPT which of the following:

A) predict price inflation.
B) negotiate price increases in contracts.
C) unilaterally define economic conditions.
D) assess reasonableness of supplier pricing on commodities.