Posted Without Comment: Deflation
According to Reuters, The “nasty” U.S. recession will tighten its grip next year as unemployment rises and weak home and stock prices imperil consumers, finance firms and debt-laden businesses, a UCLA Anderson Forecast report released on Thursday said.
“Additionally, a sustained retreat in prices for goods and services is a very real possibility that would further drag on the economy, according to the forecasting unit’s report.”
“Where only last quarter we were worried about inflation, we are now worried about its very rare opposite: deflation,” the report said. Falling prices would cut demand and discourage employers from hiring.
Douglas A. McIntyre