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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsConsumer Prices in U.S. Decline for First Time in Six Months
By Shobhana Chandra and Victoria Stilwell - Nov 20, 2013
The cost of living in the U.S. declined in October for the first time in six months, showing inflation remains below the Federal Reserves goal.
The consumer-price index dropped 0.1 percent, reflecting cheaper energy, clothing and new cars, after a 0.2 percent gain the prior month, a Labor Department report showed today in Washington. The median forecast of 85 economists surveyed by Bloomberg called for no change. Excluding volatile food and fuel, the so-called core measure rose 0.1 percent.
Companies from Wal-Mart Stores Inc. (WMT) to Macys Inc. (M) are holding the line on prices to attract more customers heading into the holiday-shopping period. Limited inflation also gives Fed officials the flexibility to maintain their $85 billion-a-month bond purchase program to stimulate the economy.
Inflation is a distant concern at this time, Russell Price, senior economist at Ameriprise Financial Inc. in Detroit, said before the report. It gives the Fed room for its continued quantitative-easing efforts.
Estimates for the consumer-price index ranged from a drop of 0.2 percent to a gain of 0.2 percent, according to the Bloomberg survey. Economists projected the core gauge would rise 0.1 percent.
more...
http://www.bloomberg.com/news/2013-11-20/consumer-prices-in-u-s-decline-for-first-time-in-six-months.html
Laelth
(32,017 posts)A deflationary spiral is what caused the Great Depression. Let us hope this is an anomaly.
-Laelth
frazzled
(18,402 posts)and they just start giving you a list of their grocery cart items and telling you you're crazy. The larger economic picture is very difficult to explain, and to comprehend. I know the argument, but it's hard for people to understand it. Including me.
katmondoo
(6,454 posts)Every time I go to the supermarket there is a price change , not just a few cents but in dollars. You cannot tell me a price drop will cause a depression.
Laelth
(32,017 posts)People have to have food all the time. They can't delay purchases of food. What caused (or at least exacerbated the great depression was deflation of the cost of durable goods. If you could buy a car today for $20K or wait until next year and by one for $15K, what would you do? You'd wait to buy the car. When everyone is waiting to buy durable goods, the entire economy grinds to a halt. Thus, the great depression.
-Laelth
HereSince1628
(36,063 posts)I don't think that's a consequence of the goodness of big oil, who are ok with the price rising again. It's because international demand for diesel was high and, gasoline is a co-product of making it. The international price for diesel was enough to keep refineries producing something of a surplus in gas supply.
None of my other consumables seems remarkably or even marginally cheaper.
Ichingcarpenter
(36,988 posts)so I can send them to their Bangladesh factory employees for thanksgiving.
Wait ..... why not to Wal Mart employees? What was I thinking?