Some Businesses Wary as Falling Prices Raise Deflation Concerns Even as Inflation Eases
-
Deflation, when prices fall, worries some business leaders and economists more than inflation currently does. Falling prices of commodities negatively impacted Home Depot's earnings.
-
With deflation, people expect lower prices in the future so they have little incentive to make purchases now. This causes pullbacks in spending that can prompt a recession.
-
China's prices were 0.2% lower in October 2022 compared to October 2021, showing deflation. US consumer prices are still 3.2% higher compared to a year ago.
-
Goods like eggs, airfares, gasoline, appliances, and smartphones are cheaper in the US compared to a year ago. This "selective deflation" is helping bring overall inflation down without much economic pain currently.
-
Walmart's CEO warned US stores could enter "a deflationary environment" with more uniform price cuts at grocery stores possible soon.