Inflation rate flat amid price confusion

Are we in a period of inflation or deflation? Or is it neither? That is what this article aims to clarify about the American economy. Over the last 12 months general food and energy prices have been slightly higher than the year before - this slow increase has led the government to assert that prices have been flat over the past few years. Economists have argued that though price increases have remained slightly above zero, they are not as high as expected and it has led many to wonder, is deflation a bigger threat than inflation to the U.S. economy? Essentially, for consumers, low prices are a good thing – but what about the unemployed? If firms are not benefiting from rising prices, then unemployment doesn’t really have a shot at getting any better. Right now, what the U.S. government is trying to accomplish is to raise the momentum of the economy, reduce unemployment and make sure that the CPI does not reach zero.