Inflation at the wholesale level rose more than expected in December. The Labor Department reported the Producer Price Index rose 0.9 percent last month and the core rate - minus food and energy - was up 0.2 percent. Energy prices rose 2.5 percent and gasoline prices were up 7.5 percent. Food prices added 1.7 percent, the largest increase in three years. It's safe to assume that energy prices in January will be down sharply and that food prices - pushed up by damage done to crops this week - will be higher.
Oil prices fell as low as $50.44 a barrel this morning and are holding below $51. Yesterday the Saudi oil minister suggested there is no need for OPEC to make further production cuts, which sent crude to the lowest level since May 26, 2005. In the past two and a half weeks, the price of crude has dropped nearly 17 percent. However, gasoline prices are down just 4.5 percent. Based on traditional calculations, we should see gas drop another 40 cents sometime soon.
Foreclosure activity in the United States dropped by 9 percent in December compared to the previous month. But, according to RealtyTrac, foreclosures are still about 35 percent higher than a year ago. This survey found that 12,623 houses in California are in the foreclosure process. Of that amount, 9,638 have received a "notice of default" - a warning that the homeowner is late making a payment. Only 636 houses became REO properties, meaning they have been repurchased by the bank. Less than one-tenth of one percent of all homes in California were foreclosed. In Georgia, which has one-tenth the population of California, the number of REOs was 1,743. And, in Ohio the number jumped to 4,122. I ask you: Is it riskier to buy a house in California or Ohio?
Have you ever been to China and had a big hunger for a doughnut? Well, good news. Dunkin' Donuts has announced plans to open its first store in Taiwan today and then expand to the mainland. It will be the latest market where Dunkin' Donuts will square of with its biggest competitor - Starbucks. Most people are surprised to learn that DD serves more cups of coffee per day - 2.7 million - than Starbucks. What makes the number even more impressive is that Dunkin' Donuts has practically no presence in California, where one-tenth of the nation's population lives. A lawsuit many years ago caused DD to sell off its California operations, but it has plans to come back. The closest store to San Diego is in Kingman, Ariz.