Consumer prices in record decline

Inflation falls by a record 1% in October, worrying economists that falling prices will become a disturbing trend.

NEW YORK (CNNMoney.com) — Consumer prices fell by a record amount in October, in another worrisome sign about the contracting economy, the government reported Wednesday.

The Consumer Price Index, a key inflation reading, fell 1% last month, according to the Labor Department. That was much weaker than September’s flat reading and exceeded the 0.8% decline a consensus of economists surveyed by Briefing.com had forecast.


Prices fell by the greatest amount since the Department of Labor began publishing seasonally adjusted changes in February 1947.

The issue of consumer prices has changed dramatically in recent months. For most of the year, inflation, driven by high energy prices has caused consumer prices to soar, reaching a 17-year high in July.

Now, economists are worried about deflation – the opposite of inflation. Falling prices may be a welcome sign for consumers in grocery store aisles and filling up at the pump, but deflation is generally a bad sign for the economy.

CNN