Consumer Prices Dip in March

Personal income up 0.3%, but inflation hits hard

(NEWSER) - Consumer spending rose at its fastest rate in four months in February—but that’s in large part due to rising gas prices. Consumer spending climbed 0.7%, while personal income rose 0.3% following January’s 1.2% jump, the AP notes. Both gains reflected a Social Security tax cut, which boosted take-home pay. But if energy prices keep climbing, household budgets will fall, and so will spending, economists say. More»

Central bank expected to tackle deflation danger

(NEWSER) - The Federal Reserve meets today to decide what medicine the wheezing American economy needs, and world markets will be keenly watching for the outcome. With no new stimulus spending from Congress likely, the central bank is the only body poised to react to signs that the recovery is running out of steam. Many economists expect the Fed will switch focus from preventing inflation to heading off deflation, the New York Times reports. More»

Forget deficit; fret over threat of 'lost decade'

(NEWSER) - No matter what you've heard panicked commentators say, the US is not the next Greece, and the government is not trying to do or spend too much in the face of the slumping economy. In reality, Washington isn't doing or spending enough, and as a result, the US could be the next Japan, trapped in a lost decade of slow growth and high unemployment, warns Paul Krugman of the New York Times . More»

State figure, tied to inflation, will drop 4 cents to $7.24

(NEWSER) - Colorado is set to become the first state to lower its minimum wage next year. The state’s minimum wage is tied to local inflation—specifically, the Denver-Boulder-Greeley Consumer Price Index, which has fallen 0.6%. The state’s minimum of $7.28 an hour will fall to $7.24 on Jan 1. Most employers, however, will be required to pay the federal minimum wage of $7.25, notes the Denver Post. More»

(NEWSER) - Consumer prices have fallen 2.1% over the past year, the biggest year-over-year decline in 59 years, the Labor Department announced today. Though the Consumer Price Index was unchanged from June to July, it was drastically lower than in July 2008, when oil peaked at $147 a barrel and gas cost $4.11 per gallon, the Washington Post reports. Economists fear dropping prices are a sign of deflation. More»