Economics

Tom Keene Talks to Economist Jim O'Sullivan

Tom talks with Jim O’Sullivan, chief U.S. economist for High Frequency Economics, about the U.S., food inflation, and the price of gasoline

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By Tom Keene

August 2, 2012 at 11:05 PM UTC

This article is for subscribers only.

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This article is part of the August 6, 2012 issue of businessweek.

I would suggest you have a more productive view of the economy than most.
Well, I wouldn’t say we’re all that upbeat. We’re not looking for recession. We’re looking for 2 percent-type growth this year. But certainly the numbers, while they’re weakening recently, haven’t collapsed. And on the positive side, and this is a big contrast with Europe especially, our banking system is expanding. Delinquency rates have been coming down, and U.S. banks have been lending again.

People going to the grocery store are seeing food prices increase. Won’t that show up in indicators like personal spending?
These food inflation numbers are running at about 2.5 percent year-over-year right now. Food is 14 percent of the CPI. It’s not going to make a huge difference if you add 1, 1.5 percent to that. It’s a bit of a boost to the inflation numbers, but not a huge, huge amount.