It's been a heck of a week on the economic front. Inflation continues to push into consumers' lives, oil pulled back just slightly from last Friday's ghastly gain, and a presidential candidate called for another government stimulus package to ignite the economy.
Economics not your forte? No worries. We'll keep this clean and simple for you. Here's the latest weekly economic roundup.
Help is on the way
After getting a taste of those widely anticipated economic stimulus checks, retail sales logged a respectable 1% gain last month. Excluding gas station sales, retail sales booked a 0.8% increase. The jump is great news for retailers like Wal-Mart (NYSE: WMT ) and Target (NYSE: TGT ) , but for the economy overall, the surging cost of oil will likely consume the lion's share of the stimulus windfall. Citing the sluggish economy and rising unemployment, presidential contender Barack Obama called for an additional $50 billion in fiscal stimulus.
Maybe oil isn't a bubble?
Oil pulled back just slightly from Friday's unprecedented super spike. Light sweet crude bounced around a range of about $131 to above $137 a barrel throughout the week. Commercial oil stockpiles took a bit of a dip, falling 4.6 million barrels to 302.2 million barrels for the week ended June 6.
Consumer prices marched up and up as the price of oil continued to wreak havoc on everything from airline prices to soaring gasoline bills. The consumer price index (CPI) jumped 0.6% in May, slightly ahead of expectations. Strip out the cost of food and energy, and prices skipped ahead by a much tamer 0.2%. On a year-over-year basis, consumer prices rose 4.2%. Now that many think the risk of a serious economic meltdown has subsided, Federal Reserve Chairman Ben Bernanke and his crew have shifted attention to inflation's mounting burden.
Hang in there, greenback
The U.S. dollar gained traction against major currencies as fear of a monster recession waned and soaring inflation put pressure on the Fed to raise interest rates again. A stronger dollar could be welcome news for companies that rely on imported raw materials, such as Dow Chemical (NYSE: DOW ) , Southwest Airlines (NYSE: LUV ) , and JetBlue (Nasdaq: JBLU ) , and have had to grapple with higher commodity costs.
Who's paying these bills?
The nation's trade deficit grew nearly 8% in April, coming in at $60.9 billion. Nearly a third of the deficit came from crude oil imported from OPEC countries -- a tab that continues to grow as the price of oil climbs. According to U.S. Commerce Secretary Carlos Gutierrez, the foreign trade deficit would have improved by $50 billion year to date if not for the effect of oil -- thanks to a weaker dollar bolstering net exports.
That's it for this week. Check back in next Friday for the latest economic roundup.
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