The Consumer Price Index, a key inflation reading, fell 1.7% last month, according to the Labor Department. That was much weaker than October’s 1% drop and exceeded the 1.3% decline forecast by a consensus of economists surveyed by Briefing.com.
Prices are decreasing. Not just gasoline. The decrease in prices is good in some ways if it stimulates the economy But there are so many people who are holding on to their money that it is difficult for people to really make dramatic shift. Especially if you have no job, or are unsure whether or not you will have a job in the near future. Low prices are good but if you have no extra money to afford what is being sold then you don’t buy. Also, if you don’t want to incur debt then you definitely want to hold on to what you have.
For necessities, decreasing prices will definitely help with the bottom line. Saving money or paying down credit cards or other bills has become a more important priority.
Too much of a decrease in prices could decrease the manufacturer’s and store’s profits and could make it necessary for companies to lay off workers. Too many stores, too much consumption via credit and now things are normalizing in a difficult way.
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