Saturday, May 03, 2008

Economic cloud over sunny Florida

"By Tom Brown

MIAMI (Reuters) - Economic data continues to suggest that fears of a new "Great Depression" in the United States are overblown. But in places like Miami and Fort Lauderdale, where the housing bust has bitten hard and prices are rising fast, the specter of economic stagnation twinned with inflation looms all too real.

"Since the 1970s we haven't really seen this simultaneous threat of an economic slowdown, and recession, side by side with the threat of inflation," said Sean Snaith, an economics professor at the University of Central Florida.

Nationally, inflation was flat in February, according to the U.S. Labor Department's consumer price index, the most widely used gauge.

But in Miami and Fort Lauderdale, prices were up by 5.3 percent that month, according to the department's southeastern office, in Atlanta, the highest of any metropolitan area in the country.
The department gives national figures for March on Wednesday. The regional figures are released every two months, with the next ones out in May.

For many in Florida, a state that people are leaving in droves because of high property tax and home insurance rates, the biggest and harshest rise has been in energy costs, up 18 percent in the 12 months to the end of February.

And they could continue surging amid Energy Department warnings that gasoline prices could soon hit $4 a gallon in some areas.

"Everything is high. Everything is going up," said Cookie Elias, a Miami-based mother of three as she packed her young children into a minivan after shopping at a local Costco discount retailer in Miami."

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