The price at the cash register ticked higher in October, though it was driven by the cost at the pump and on the lot.

Energy prices and new car sales (the highest in 28 years) pushed consumer prices upward in October, they're still cheaper than they were a year earlier. The Labor Department reports that consumer prices edged up 0.3% last month, a tad higher than the 0.2% anticipated. Take food and energy out of the equation, and inflation rose 0.2%, again ahead of the 0.1% that analysts expected.

The interest in using natural gas as an alternative to crude has helped natural gas-based companies appreciate in value. Chesapeake Energy (NYSE: CHK) has benefited from that interest, with a gain of more than 20% this year.

CHK is an interesting story in that during the craze in energy prices in 2008, the CEO of the company was forced to liquidate his entire position. That forced selling created an opportunity to buy the stock at an incredibly cheap price, even beyond the artificially low energy prices reached earlier this year.

Here's an idea if you are worried about your heating bills this winter. The price of natural gas is crashing. The price decreases last week continued a down trend that's gone on for six months. Why? The economic downturn slows demand for gas and many companies are announcing layoffs and closing plants around the country. Reduced prices for natural gas are also a result of growing capacity in the U.S. because of increases in production at new fields. Natural gas prices are at multi-year lows falling from 65% from more than $13.31 per MMBtu (the way gas is measured) in July 2008 to under $5 -- the lowest since October 13, 2006.

United States Natural Gas (NYSE: UNG) is an exchange-traded fund (ETF) that reflects the price of natural gas in the United States. UNG attempts to mirror the performance, net expenses, of natural gas at the Henry Hub, Louisiana.

This morning my wife asked me this question and I had no idea how to answer it. But it's true that oil is down -- it trades at $34.39 a barrel; while gasoline prices have been rising between 10 and 20 cents a gallon from the low. I paid $1.66 a gallon for mid-grade three weeks ago and $1.79 for mid-grade last week. So what's the answer? Less supply because refiners shut down for regular maintenance during this time of year.

While this may not be true throughout the country, it appears to be so in California. In late December, The MercuryNews predicted that gasoline prices would rise 10 to 20 cents a gallon. Why? California refiners including Exxon-Mobil (NYSE: XOM) and Chevron (NYSE: CVX) cut back on production for their usual maintenance needs in January. Moreover, a BP plc (NYSE: BP) plant in Carson, CA , had mechanical problems that affected production.

Overall this means lower supply with demand remaining relatively constant. California's Energy Commission reports that production of CA's gas blend fell 11% in January from the previous month. In the short run, prices should fall back as these refineries go back to normal production. But experts predict that gasoline prices nationwide could hit $2.50 a gallon nationally this summer.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College. Portfolio recently published his eighth book, You Can't Order Change: Lessons From Jim McNerney's Turnaround at Boeing. He has no financial interest in the securities mentioned. He has no financial interest in the securities mentioned.

One of the great things about a global financial collapse is that economic activity slows down so much that people use less oil. And one of the more interesting aspects of this collapse is that despite the terrible problems we face in the U.S., investors are flocking to the dollar as a symbol of permanence in a turbulent world. Since oil is traded in dollars, the combination of a stronger dollar and weaker demand leads to a lower price.

For example, today oil went as low as $86.36 -- which is 41% below its July peak of $147. Meanwhile, the dollar hit a 13-month high of $1.36 to the Euro -- that's 15% stronger than the $1.60 it traded at this summer. That may be because the U.S. passed its $810 billion bailout plan and Europe has not yet figured out what it will do to deal with its financial crisis. Not to worry, oil is still 260% higher than the $24 it traded at in January 2001 and the dollar has lost 48% of its value of $0.92 to the Euro at which it traded back then.

Where do we go from here? That depends on two variables: how much oil-producing nations cut back on production and how the dollar performs relative to other currencies as this global financial crisis unfolds. If oil-producing nations cut back on production, prices will rise as long as the supply contraction matches the decline in demand. And as long as the world perceives that the U.S. is the world's financial safe haven -- the dollar could strengthen. And that would push oil prices lower.

In a nutshell, oil prices will keep dropping unless oil producing nations drastically slash production and the dollar plunges.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.

Even with some modest recovery in airline stocks, it may be too early to celebrate. The worst may not be over for the industry.

The International Air Transport Association says that global losses for airlines could top $6.1 billion this year. The Wall Street Journal quotes ATA Chief Executive and Managing Director Giovanni Bisignani as saying, "We are bracing for more situations of airlines collapsing" amid higher fuel prices and lower revenue.

The slowdown is apparently moving to Asia, a major destination for many large US and EU airlines.

United (NASDAQ: UAUA) is a good example of a US airline that many thought would be on the rebound. New fear of rising oil prices has spoiled that a bit. After falling from a 52-week high of $51.60, shares crashed to $2.80. They have recently made a minor recovery to $12.40. But, in the last two days, UAUA shares have been off sharply.

Oil is still just below $120. Even at that level, down from $143, airlines face huge increases in fuel prices over last year. A modest disruption in oil supply could send prices back up again.

The market sees US airline stocks as having potential for big returns. But, with the price of oil making a potential bottom, the carriers are still in too much trouble to have a real recovery. Buying shares in the companies still offers more risk than reward. The industry may still have operators that have valuations heading toward zero.

Douglas A. McIntyre is an editor at 247wallst.com.

Europe's economy contracted in Q2 for the first time since the euro was launched more than 10 years ago, as exports underperformed and energy costs cut into consumers' disposable income, Eurostat, the European Union's statistics office announced (PDF) Thursday.

Euro-zone Q2 GDP fell 0.2% and EU27 Q2 GDP -- which includes nations in the European Union but not formally a part of the euro currency system -- fell 0.1%, Eurostat said. In Q1, Euro-zone GDP rose 0.7%.

Further, on a year-over-year basis, euro-zone GDP increased 1.5%, with inflation running at about 4.0%, well above the European Central Bank's 2.0% annual limit.

Economist: 'Bad news for global economy'

Economist David H. Wang told BloggingStocks Thursday Europe's slowing economy "is bad news for the global economy."

"This is bad news because we need European growth to prevent a global economic slowing. But the economies in two major European economies are clearly slowing. Germany's GDP fell 0.5% in the first quarter, and France's fell 0.3% in the second quarter, so given their make-up in the euro-zone, Europe has experienced a pronounced slowing," Wang said.

High gasoline prices are putting the squeeze on companies and their workers. People are leaving their jobs due to the high commuting costs. The New York Times reports that a resume service received "14 calls last week and 9 of those named high gas prices as their No. 1 reason for leaving their job."

And by my count, the Times presents seven ways that companies are changing to relieve the pressure:

• Encourage more telecommuting. The Times describes how "Citigate Cunningham, a public relations company, now encourages workers to stay home whenever possible, providing laptop computers and BlackBerrys to enable telecommuting, and reimbursing them $40 a month for high-speed Internet connections in their homes."
• Give employees money to pay for gas. Since June, OperationsInc., a human resource consulting firm, gave employees up to $100 a month on an American Express (NYSE: AXP) card "to offset rising gas prices."
• Rent offices closer to workers' homes. Microsoft Corp. (NASDAQ: MSFT) recently "leased three large office complexes far from its headquarters" to cut 7,000 employees' commutes.

Amid the cascade of data flowing from the financial world, every once in a while there's a data point with not only macroeconomic significance, but also potentially with trend-indicator characteristics, as well.

One such data point may have occurred Wednesday when MasterCard (NYSE: MA) released data indicating that U.S. consumers purchased an average of 9.45 million barrels of gasoline per day in the week ended June 20, 2008, down 2.7% from the 9.71 million gallons per day purchased a year earlier, Bloomberg News reported.

The consumption decrease occurs after a roughly 30-40% increase in gasoline prices compared to a year ago, and if the decline continues, it would represent the 'demand destruction' level that's essential to slowing gasoline price increases.

Further, a key oil analyst holds that view. Daniel Yergin, chairman of Cambridge Energy Research Associates, told a U.S. Congressional panel that "...2007 may well have been the top, the break point, in terms of gasoline demand," Bloomberg News reported Wednesday. He added that the price of oil has hit a break point where the United States will begin to seek alternatives.

U.S. producer prices rocketed a seasonally-adjusted 1.4% in May, the U.S Labor Department announced Tuesday, as energy and food prices continued to increase wholesale costs at an alarming rate.

Economists surveyed by Bloomberg News had expected the April 2008 PPI rate to increase by 1.0%.

The core rate, which excludes food and energy costs, increased 0.2%, the Labor Department said, inline with the Bloomberg News estimate.

For the past 12 months, producer prices have increased 7.2% and the core rate has risen 3.0%. Also, the core intermediate PPI - a benchmark, leading indicator of inflation and one the U.S. Federal Reserve monitors closely, increased 2.0% in May 2008 -- its biggest increase since 1980.

Economist David H. Wang told BloggingStocks Tuesday "PPI inflation is now way too high. The Fed's period of interest rate accommodation ends with this report."

The average price of gas finally crossed $4 last week, perhaps on its way to $5.

According to The Wall Street Journal, "The record nationwide average for regular-gasoline prices, announced by auto club AAA, follows Friday's near-$11 surge in oil prices to a record $138.54 a barrel."

While it makes a good headline, it is really no more important than when gas went above $3.95 or if and when it moves above $.4.05. What is important is that, at the current level, gas on its own could break the back of the consumer, and of many businesses.

It is not unusual for drivers to use 20 gallons of gas a week. For that consumer, the difference between $2 gas and $4 gas is $2,100 a year. A family making $40,000 is probably keeping $30,000 after taxes. So, 7% or 8% of their net income now goes to gasoline. That does not leave much for the rising cost of food and a mortgage.

The news is obviously just as bad for industries like farming and the airlines.

If investors want to see where the economy and markets are going, watch gas prices. They are probably a better proxy for how bad things are for the consumer than any other single measure. Gas at $5 would be a catastrophe.

Douglas A. McIntyre is an editor at 247wallst.com and author of the Ten Stocks Under $10 letter.

U.S. consumer confidence in May 2008 plunged to its lowest level in almost 28 years, an indication American adults remain very concerned about the near-term health of the U.S. economy as it moves closer to its first recession in six years.

The Reuters/University of Michigan Surveys of Consumers said its final reading of consumer confidence for May 2008 fell to 59.8.

It was the index's lowest reading since June 1980 - - a period also characterized by high oil/gasoline prices and a sluggish U.S. economy.

Economists surveyed by Bloomberg News had predicted that the May 2008 index would fall to 59.5. The index stood at 62.6 in April 2008 and 69.5 in March 2008.

Family finance, inflation concerns

In the May 2008 survey, half of all families reported that their finances have recently worsened. Also, inflation expectations rose in May 2008 to their highest levels in more than two decades.

Crude at $130 a barrel is bad enough. Who needs more negative news about oil prices? It appears that additional data supporting further increases keeps coming, no matter what.

Recent research shows that oil supply out of countries which are net exporters of oil is not keeping up with demand from consuming nations. According to The Wall Street Journal, "Fresh data from the U.S. Department of Energy show the amount of petroleum products shipped by the world's top oil exporters fell 2.5% last year, despite a 57% increase in prices." If those nations could have shipped more crude, wouldn't they have done so to make more money?

There is a great deal of data which shows that oil-producing nations are keeping more of their product to build their own infrastructure and fuel their own cars and trucks.

But, the answer to lower shipments may be more sinister than that. Oil-producing countries might make more money releasing extra crude this year, but that could push prices down. If they are more liberal in sending oil abroad over the next several years, they might get more cash from volume but less from higher prices. Oil supplies may be being "managed" by OPEC and its friends to keep prices high for the next decade.

There is a conspiracy theory for everything else. Why not for oil supply?

Douglas A. McIntyre is an editor at 247wallst.com and author of the Ten Stocks Under $10 newsletter.

Like, his paymasters, the oil companies -- who contributed $2.7 million to his 2004 campaign -- George W. Bush is feeling sorry for himself. Perhaps his record low poll ratings are hurting his feelings. He went to Saudi Arabia and asked it to increase production. He went to the Middle East and asked them to make peace -- it's a nice sentiment but will results follow? But that's not why Bush is whining.

BusinessWeek reports that Bush's complaint is that he thinks General Electric Company's (NYSE: GE) NBC News was unfair in the way it edited an interview. In the Israeli parliament, Bush gave a speech which none-too subtly implied that Barack Obama was like Nazi appeaser, Neville Chamberlain, because Obama has said he would meet with Iranian leaders. Bush thought he was being clever in his non-denial denial. Now he is complaining that NBC is being "deceitful."

That's rich coming from the person who got the U.S. into a war with Iraq based on false claims of Weapons of Mass Destruction (WMD) and ties to Al Qaeda. Is it the "Mission Accomplished" Bush or the "Heck-of-a-job-Brownie" Bush who's complaining about NBC News's "deceit?" Meanwhile -- as I posted here, here and here -- the oil companies have been whining because their earnings are down -- the price of oil has doubled and they have only been able to increase wholesale prices by 39%. Boo hoo!

So as you stand at the pump filling up your tank with $4 a gallon -- a surprise to Bush -- shed a tear for Bush and those poor, suffering oil companies.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He owns GE shares.

U.S. producer prices increased a scant 0.2% in April 2008, as auto and furniture costs offset substantial rises in food and energy prices, the U.S Labor Department announced Tuesday.

However, the core rate, which excludes food and energy costs, increased 0.4% -- a pace well above consensus expectations. Economists surveyed by Bloomberg News had expected the April 2008 PPI index and core rate to increase by 0.4% and 0.2% respectively.

So far in 2008, producer prices are increasing at an alarming annual rate, 8.5%, compared to 8.4% for the same period a year ago. The core rate is increasing at a 5.2% annual pace, compared to 2.1% for a year ago.

12-month PPI accelerates

For the past 12 months, producer prices have increased 6.5%, and the core rate has risen 3.0%. The core rate's advance is the largest year-over-year core rate increase since 1991.