Increasing jobs and consumer spending to spark round of inflation

Oh, my bad, did I say inflation? I meant to say that inflation has suddenly disappeared and prices are falling.

Inflation has essentially disappeared...

...Consumer prices fell in April for the first time in more than a year...

...Declining gas prices pulled overall prices down 0.1 percent last month. Gas prices are predicted to sink lower still this summer...

...Core inflation, which excludes volatile food and energy prices, was flat in April. Over the past 12 months, it has risen just 0.9 percent -- the smallest increase in 44 years...

...The weakness of the economy has kept inflation so low that some economists are beginning to worry about the possibility of deflation -- a destabilizing period of falling prices and wages...

Similarly, all those freshly employed folks don't seem geared up to do much driving during what is supposed to be the peak driving season. When is the last time you saw gas prices declining significantly during summer in an economy that is claimed to be in recovery? My guess would be ummmm...never.

A nice round of deflation and further declining interest rates must have those people who just bought new cribs under the ObamaBucks giveaway program feeling kinda green at the gills...many could be underwater before the year is out.

posted by Purp at 07:53 PM

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