Nov 19, 2008

Deflation Update: US reports record drop in consumer prices..

The US reported a record drop of 1% in consumer prices this week (after reporting a record drop in producer prices just yesterday).. read the Bloomberg story another interesting Bloomberg story here.

Fortunately the drop was led by drop in energy prices which fell by 8.6%.. core prices fell as wel (excerpt from Bloomberg)l:

The drop in core prices reflected declines in the cost of clothing, automobiles, air fares and hotel rates. New-vehicle prices fell 0.5 percent and clothing costs dropped 1 percent. The price of airfares plunged 4.8 percent, the most since June 1999....The cost of all services, excluding fuel, was unchanged, the first time it hadn't increased since 1982.

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