healthcare costs

Inflation Rises At Fastest Pace In 5 Years

It’s been some time since a Survival And Prosperity post focused on inflation.

I suspect I’ll be blogging about it more in the coming months.

Jeffry Bartash wrote on MarketWatch this morning:

Inflation rose in 2016 at the fastest pace in five years, as rising rents and medical care and higher gas prices put a squeeze on consumers.

The consumer price index jumped 0.3% in December, the government said Wednesday…

A string of sharp gains since late summer helped drive up inflation by 2.1% for the full year, marking the biggest increase since a 3% gain in 2011

(Editor’s note: Bold added for emphasis)

Bartash added:

For now it doesn’t look like inflation will wane soon. Gas prices rose again in January and many economists predict that aggressive stimulative measures by the new Trump administration could lead to even higher inflation

(Editor’s note: Bold added for emphasis)

Jeffrey Sparshott added over on The Wall Street Journal website late this afternoon:

The latest figures- driven in part by an uptick in energy prices- suggest a four-year stretch of historically low inflation could be ending

While details remain uncertain, the president-elect has pledge lower taxes and more infrastructure spending. That could lead to faster economic growth and accelerating inflation

(Editor’s note: Bold added for emphasis)

As to what this might mean for interest rates, Fed Chair Janet Yellen spoke to the Commonwealth Club of California this afternoon. Ann Saphir reported on the Retuers website:

With the U.S. economy close to full employment and inflation headed toward the Federal Reserve’s 2 percent goal, it “makes sense” for the U.S. central bank to gradually lift interest rates, Fed Chair Janet Yellen said on Wednesday…

The Fed chief said that she and other Fed policymakers expected the central bank to lift its key benchmark short-term rate “a few times a year” through 2019, putting it near the long-term sustainable rate of 3 percent

(Editor’s note: Bold added for emphasis)

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Sources:

Bartash, Jeffry. “Inflation climbs at fastest pace in 5 years, CPI shows.” MarketWatch. 18 Jan. 2017. (http://www.marketwatch.com/story/inflation-climbs-in-2016-at-fastest-pace-in-5-years-cpi-shows-2017-01-18). 18 Jan. 2017.

Sparshott, Jeffrey. “U.S. Inflation Gauge Tops 2%, Supporting Fed’s Plan to Raise Rates.” The Wall Street Journal. 18 Jan. 2017. (http://www.wsj.com/articles/u-s-consumer-prices-up-2-1-in-december-from-year-earlier-1484746534). 18 Jan. 2017.

Saphir, Ann. “Fed’s Yellen says ‘make sense’ to gradually raise interest rates.” Reuters. 18 Jan. 2017. (http://www.reuters.com/article/us-usa-fed-yellen-idUSKBN1522VH). 18 Jan. 2017.

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Report: Health Care Expenses To Rise 8.5 Percent In 2012

Sounds like health care costs could be heading significantly higher next year. From MarketWatch’s Russ Britt on Wednesday:

Employers can expect to see an acceleration in health-care cost increases in 2012, with expenses rising 8.5% next year, according to a study released Wednesday by PricewaterhouseCoopers.

The 30-page study says that the recession put a lid on health-care costs, which should keep the inflation rate to 8% for 2011, but those price hikes are getting steeper as the recovery gains momentum.

“Now, a few months into 2011, employers and health plans say utilization remains somewhat deflated, but they’re already worried about a rebound in 2012,” the study says. “Add to this recessionary effect the changes brought on by health reform, and the variables affecting cost trends in 2012 become an interesting blend of reactions.”

(Editor’s note: Italics added for emphasis)

The study follows a report from March that predicted a number of U.S. companies would be altering their healthcare plans next year. CNN Money senior writer Parija Kavilanz wrote back on March 10:

Come 2012, millions of Americans who get health care coverage through their employer should brace for some big changes.

Charging higher contributions for dependent coverage and dropping retiree accounts, are among the steps companies are considering as they fight rising medical costs and new expenses tied to health reform, according to a new report Thursday from human resources consulting firm Towers Watson.

In addition to the aforementioned changes, Kavilanz noted other steps being looked at include “spouse penalties,” when an employee’s husband or wife has access to health insurance through their own employer but refuses it to be added to his or her spouse’s plan, and cracking down on unhealthy lifestyles.

Sources:

Britt, Russ. “Health-care expenses to rise 8.5% in 2012: study.” MarketWatch. 18 May 2011. (http://www.marketwatch.com/story/health-expenses-to-rise-85-in-2012-study-2011-05-18). 20 May 2011.

Kavilanz, Parija. “Health care: Employers making big insurance changes in 2012.” CNN Money. 10 Mar. 2011. (http://finance.yahoo.com/news/Health-care-Employers-making-cnnm-917752777.html?x=0). 20 May 2011.

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Friday, May 20th, 2011 Health, Insurance, Main Street, Retirement 2 Comments
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