by Colin Lovett, PICurrent Managing Producer
You may have seen a report on TV today about consumer prices falling in October. Some may look at this as reason to celebrate, since things will cost less. Who doesn’t want that, right?
Not so fast. Yes, prices did fall by a whopping 1%, the biggest decline since they started keeping track of this in 1961. It is also the first dip of any kind in 25 years. If inflation is our usual economic bad guy, then say hello to his seldom seen evil twin: deflation.
The good news is a dollar will go further for buying food, clothes and other items. With so many losing their jobs, this will be welcome. However, the falling prices indicate less demand for products, which could force businesses to cut back even more.
This could also be bad news for the upcoming holiday shopping season, which is usually the busiest time for stores. If demand continues to drop, retailers will hire fewer seasonal workers and could even layoff regular workers.
What can you do:
- Take advantage of the cheaper prices to buy things you really need. This will help you and the economy.
- Don’t go nuts by going into debt to buy things you really don’t need. Saving money is the best way to ride out a recession, so keep spending within your means. See our earlier post on Mapping Your Financial Future to learn more.
Our sister site, The Beehive, has a great online budget building tool.
To learn more, please visit:
[...] me every morning. Wake up, pour coffee, prepare to get knocked out of my chair by news headlines. Yesterday, we learned that prices are actually falling. Not a good [...]