Falling Prices May Not Be Good News

[pennypinch]

According to experts, falling prices may not be good news, at least not to our already struggling economy.

I haven't noticed any falling prices in my area but they are saying that prices for retail items may fall.

They say if the companies do drop prices that will only cause more harm to our economy. Economists are worrying about deflation because they say that means the demand for products are down. If people are not buying, the companies will purchase less to sell. Then production will slow down and more layoffs will occur.

They say deflation played a major role in the Great Depression.

Experts say that even the fear of this happening can cause for it to actually happen. They say if people think cheaper prices are in the future they will hold of making purchases. This will begin the cycle that will do more harm than good in the end.

As I said above, I work in a retail store and prices there have been unchanged. I would love to see cheaper prices but I do understand how that will cause more job losses and hurt the economy even more.

[carol b]

I have to agree with you I haven't seen price cuts anywhere. Wal Mart is even expensive. Not as bad as the little stores but dang. I know gasoline prices have risen here again. As of today it is at $1.99 a gallon.

[moneysense]

Yes, the experts do say that falling prices wont be good but, the bottom line is that people cant spend what they dont have.

2.9 million jobs were lost in 2008, that has a great bearing on people not spending because they arent working and most are living on unemployment, which isnt a lot of money with which to pay bills and get groceries let alone enough left over to spend on what they have to have, let alone what the would like to have.

I think that the biggest problem in this country right now is a lack of jobs.

I have a son in law that is working as a civilian in Iraq in order to make enough money to keep his family here in the States afloat.

Its pretty bad when a man has to go half way around the world in order to make enough money to pay his mortgage and utility bills and feed his family.

What we need is more and better paying jobs. And sooner or later someone that can do something about it will finally figure that out. At least, I hope so.