Monday, August 17, 2009
After a year of unrelenting negative economic indicators, the lack of growth in one leading statistic is actually cause for good news. According to the Labor Department, inflation is essentially non-existent, based on the fact consumer prices were flat in July. In fact, over the past 12 months prices fell 2.1%, the steepest drop since January 1950.
“Right now, there is no inflation out there,” David Wyss, chief economist at Standard & Poor’s in New York, told the Associated Press. “The big issue is still a lack of economic growth.”
While the absence of inflation is good news for most consumers, seniors won’t be happy come next January. With prices stable, the government is unlikely to give the nation’s 50 million Social Security recipients their annual cost-of-living bump in 2010. Such a development would contrast sharply to 2009 and the 5.8% COLA (cost-of-living adjustment) that recipients received, the largest increase in more than 25 years.
-Noel Brinkerhoff
Inflation Tumbles; Buying Subdued (by Martin Crutsinger, Associated Press)
Comments