The Consumer Price Index, the U.S. government’s inflation measure, is down 1.3%. This drop was driven by a 30% drop in energy commodities and a 2.5% drop in food prices.

Lower prices are usually the result of a severe recession. As unemployment and a challenging economy leave consumers with less money to spend, businesses are forced to cut their prices.

But although this may sound like good news, economists fear the risk of deflation. If prices continue to drop, the economy will slow down further.

For the complete story on inflation and the Consumer Price Index, read Chris Isidore’s article here.

Other Related Topics: Economic Growth , Inflation Rate , Jeanne M Smith

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