Euro zone crisis

These are 2 articles from the WSJ that serve as pretty good explanations of the Greek and Euro situation.

Crisis Poses European Central Bank Risk

Greek Rescue Plan May Top €100 Billion

Econ news

Hi folks,

1.       Time to travel to Europe!

S&P Downgrades Spain

Standard & Poor's downgraded Spain's long-term credit-rating just one day after roiling global markets with downgrades for both Greece and Portugal. The move hit stocks and sent the euro to one-year lows.

2.       Home prices are up from a year ago, but down from last month! So what do you make of that?

Home Prices Remain Under Pressure

U.S. home prices fell for the fifth straight month in February amid pressure from foreclosures and high inventories, but prices rose from a year ago.

3. In a similar contradictory vein,

The Conference Board’s Consumer Confidence Index rose in April, but the University of Michigan’s Index of Consumer Sentiment remains weak.

4.       From the (national) Council for Economic Education, a very thorough discussion of the labor market.

You'll find the new lesson titled, "Focus on Economic Data: U.S. Employment and the Unemployment Rate, April 2, 2010," at:

http://www.econedlink.org/lessons/index.php?lesson=906&page=teacher&utm_source=newLessons&utm_medium=email&utm_campaign=lessons20100428

This lesson examines the April 2, 2010, U.S. Department of Labor, Bureau of Labor Statistics, announcement of employment data and the unemployment rate for the month of March, 2010. This lesson introduces the basic concepts of the BLS employment and unemployment data. The meaning and importance of the data are discussed. Assessment exercises are included for reinforcing knowledge of the concepts.

Grade Level: 9-12

Key Economic Concepts: Business Cycles, Labor Force, Macroeconomic Indicators, Unemployment, Unemployment Rate

As always, you'll find even more free lessons at http://www.econedlink.org/. Thank you for making 'EconEdLink.org' a part of your classroom.

--

John LeFeber

EconEdLink.org Project Manager

Council for Economic Education

jlefeber@councilforeconed.org

402.438.6921

PS: Please try this lesson today, and share it with your fellow teachers tomorrow.

PPS: If you like this online lesson, you might want to check out a related resource, Virtual Economics, and preview the CD at http://store.councilforeconed.org/virtualeconomics.html

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industrial output and sugar

The industrial output numbers didn’t really surprise anyone. But I do think that the influence of weather on the economy helps students see that this is real stuff we’re talking about!

Weather Crimps Industrial Output


The sugar article is a great example of supply and demand, trade restrictions, and distribution of benefits and costs among sugar producers and sugar users. The difference between U.S. domestic sugar prices and world sugar prices also might be surprising to your students.

Price Gap Spices Sugar Fight


Hope all is well.

Housing starts sink, permits tumble

Analysts blame the weather for housing starts but that may be a stretch given the news on permits which is less “weather sensitive.”
Housing Starts Sink

By the way, rumor has it that Janet Yellen, SF Fed President and CCEE Advisory Board Member is about to picked for the position of Vice Chair of the Fed by President Obama.

Core PPI falls, No change in rates at the Fed

Good morning folks,

The Producer Price Index fell .06% while the Core CPI rose by .01%.

Wholesale Prices Fall

I have attached the WSJ’s explanation of the PPI with a couple of nice charts.

http://online.wsj.com/mdc/public/page/2_3063-economicCalendar.html?mod=econtracker?mod=wsj_econtracker

As expected yesterday, the Fed left rates unchanged. Of more interest is the fact that they will end their purchase of mortgage backed securities at the end of March, raising fears of higher interest rates.

From the WSJ
Some analysts have worried that the end to the Fed's mortgage buying could raise mortgage rates. So far that hasn't happened. Rates on 30-year mortgages have fallen to around 5.05% from 5.28% at the start of the year, according to research firm HSH Associates, even as Fed officials telegraphed the program would end soon.

Other long-term interest rates have been stable. Yields on 10-year Treasury notes have hovered between 3.6% and 3.8% this year.

"Mortgage rates won't move appreciably," said Scott Simon, a managing director at Pacific Investment Management Company, a big mortgage securities investor. He said private investors, who stepped aside when the Fed jumped into the market, are ready to return.

 News Hub: Stocks End Higher After Fed Holds Steady

WSJ's Emma Moody joins the News Hub to discuss today's market reaction to the Federal Reserve's decision to end Mortgage Buys and to keep interest rates historically low for an extended period.

It is not as though credit is all of the sudden going to become much more difficult to get. The big problem for the housing market is unemployment," Mr. Simon said.

Look for the CPI tomorrow along with first claims for unemployment.

Jobless Claims Jump, Durable Goods Orders Up

The durable goods news can be a teachable moment. While the aggregate is up, the adjusted figure excluding transportation is down.

 Jobless Claims Jump Again 

The number of U.S. workers filing new claims for jobless benefits unexpectedly surged last week to the highest level in over three months. Separately, durable-goods demand soared 3%.

CPI and Core CPI

As expected, the markets didn’t seem to react to the Fed’s move to lower the discount rate yesterday.

Today’s news about the CORE CPI is a good opportunity to teach students about the difference between the rate of inflation and the core rate (the overall rate minus the volatile food and energy sectors).

From CCEE’s Teacher Guide to the Standards
With price data such as the CPI, an attempt to study long-term trends will be misleading if extremely volatile items are included in the survey. To minimize volatility, a “core” index which excludes the volatile food and energy sectors is calculated. Similarly, orders for durable goods are reported along with durable goods orders “excluding transportation and defense orders” since these components tend to “lumpy” and distort the trend.


From the Wall Street Journal
__________________________________
News Alert
from The Wall Street Journal

U.S. consumer prices rose 0.2% in January from the previous month, the same increase as in December 2009. But core prices, which strip out energy and food items and are more closely watched by the Federal Reserve, fell by a monthly 0.1% in January. The last time core prices fell was in December 1982. The drop leaves scope for the Fed to keep supporting the economy with record-low interest rates.

http://online.wsj.com/article/SB10001424052748703787304575075052818196106.html?mod=djemalertNEWS