Inflation Rate

Where should you invest -- and not invest -- your money now?Coca-Cola Co., General Electric Co., Merck & Co. Inc. and Procter & Gamble Co. are listed as core stocks for long-term appreciation by S&P Outlook.The AAAI Journal says, "Try the 'Dogs of the Dow' approach. This strategy advises buying the Dow's highest-yielding stocks, namely out-of-favor, underpriced blue chips. Dow stocks represent large firms with management depth and strength to recover from short-term stumbles.""There's still some room on the downside, with more bad sessions possible -- but we're nearing bottom," says Seth Glickenhaus, stock adviser.

THE latest national data on home value appreciation in the 140 largest real estate markets confirm what may be the least-heralded financial story of the decade: For homebuyers and owners, the combination of the national inflation rate, federal tax policy changes, and the growth of home resale values have produced after-tax returns that are unprecedented in the post-World War II era.From January 1990 through December 1998, average home value gains in 57...

IF YOU OWN a home, the odds are that you've been quietly racking up nice gains in equity value on your home this fall. And the odds are even stronger that you've done better -- probably a lot better -- than the inflation rate in the economy.Consider the latest numbers from a national study that monitored resale value changes affecting more than 20 million homes in 150 metropolitan markets from the third quarter of 1997 through the third quarter of 1998. Bear in mind that all these gains have occurred in a national economic environment in which the annualized rate of inflation for all goods and services, as measured by the Consumer Price Index, has hovered in the range of 2 percent to 2.2 percent.

Low inflation is a welcome economic sign for spenders, but for savers, it can be too much of a good thing. The effect of super low inflation could be seen in recent days when the government announced changes to savings bond rates and retirement account limits that are pegged to inflation. Savers can now expect meager returns on the inflation-protected Series I Savings Bonds, if they even still want to buy them. And employees won't be able to sock away more next year in a 401(k)

WASHINGTON -- The Organization for Economic Cooperation and Development predicted yesterday that the Federal Reserve would soon push up short-term interest rates because of concerns that the inflation rate had stopped falling.The Paris-based organization, which promotes economic cooperation among its 24 member nations, said in a new study that "there is good reason to expect inflation to remain below 3 percent." But it added that with short-term rates so low, unemployment edging down and factory utilization rising, monetary tightening could be justified to head off a resurgence of inflation.

WASHINGTON - Soaring energy prices punished ordinary Americans in May, triggering the highest run-up in inflation in six months and exceeding the expectations of economic forecasters, the government reported yesterday. Consumer prices rose 0.6 percent, as measured by the Labor Department's Consumer-Price Index. Prices have risen by 4.2 percent, slightly above the 4.1 percent rise in prices for last year. Those annual numbers reflect the rise in all prices across the economy, and don't necessarily capture the pain that many Americans are feeling at the cash register.

WASHINGTON -- U.S. consumer prices rose a smaller-than-expected 0.2 percent in September, while manufacturing showed signs of slowing, further evidence inflation remains in check, government figures showed yesterday.The closely watched core rate of the consumer price index, which excludes food and energy costs, rose 0.2 percent in September. In August, the CPI rose 0.2 percent and core rate increased 0.1 percent, indicating the economy may finish the year with the lowest inflation rate in 11 years.

WASHINGTON -- Consumer prices climbed a moderate 0.3 percent in February, the Labor Department reported yesterday, but "core" inflation was an unnerving 0.5 percent for the second straight month.Analysts viewed the results, combined with Friday's report of the biggest jump for producer prices in two years, as solid evidence that inflation was no longer on the wane."I think we've troughed out," said Alan C. Lerner of the Bankers Trust Co., referring to an inflation rate that retreated from 6.1 percent in 1990 to 3.1 percent in 1991 and to 2.9 percent last year.

HERE ARE some tips to make your financial life a little better:ACORNS TO OAKS: "Begin at birth! If you invest $1,000 at 6 percent when your child is born, at age 65 the $1,000 will be worth $44,145. If you wait till the child is 16, your $1,000 will grow to only $17,378. If you stall till the child reaches 40, you will have a tiny $4,292." ("Taking Control of Your Financial Life.")SMALL IS BEAUTIFUL: If in 1940 you invested $1,000 in S&P 500 index companies, you would now have $1,007,909.

NEW YORK -- Stocks rallied yesterday amid signs that President Clinton's deficit-reduction plan is poised to gain Senate approval.Diminished concern about a rising inflation rate contributed to the surge in stocks, traders said.The Dow Jones industrial average, which lost 27.40 points Friday, gained 24.91, to close at 3,552.34, just shy of its record close of 3,554.83, set Thursday. The Dow soared as high as 3,569.50, at about 3 p.m., before falling victim to computer-driven sell orders."I think there's more reason to be optimistic about some sort of budget agreement getting through the Senate," said Edward Laux, head trader at Kidder, Peabody & Co.Sen.